Abercrombie & Fitch (NYSE: ANF) Started as Market Perform at Wells Fargo.
American Eagle Outfitters (NYSE: AEO) Started as Market Perform at Wells Fargo.
Analog Devices (NYSE: ADI) Cut to Neutral at BofA/Merrill.
Alcoa (NYSE: AA) Cut to Underperform at BMO.
Altera Corp. (NASDAQ: ALTR) Cut to Neutral at BofA/Merrill.
Colgate-Palmolive (NYSE: CL) Cut to Neutral at BofA/Merrill.
Leap Wireless (NASDAQ: LEAP) Cut to Neutral at Piper Jaffray.
PMC-Sierra (NASDAQ: PMCS) Cut to UNderperform at BofA/Merrill.
Xilinx (NASDAQ: XLNX) Cut to Neutral at BofA/Merrill.

You are invited to join our free daily email distribution list from 24/7 Wall St. to hear about ongoing day trader and options trader alerts, analyst upgrades and downgrades, stock and market rumors, Buffett and guru investor news, M&A and IPOs, and more.

JON C. Ogg

AOL Inc. (NYSE: AOL) Started as Underperform at Credit Suisse.
ARM Holdings (NASDAQ: ARMH) Started as Buy at Deutsche Bank.
ExxonMobil (NYSE: XOM) Raised to Buy at Societe Generale.
Finisar (NASDAQ: FNSR) Raised to Overweight at Piper Jaffray.
Mead Johnson Nutrition (NYSE: MJN) Raised to Outperform at Credit Suisse.
Palm, Inc. (NASDAQ: PALM) Raised to Hold from Sell at Jesup & Lamont.
PMC-Sierra (NASDAQ: PMCS) Cut to Equal Weight at BArclays.
RadioShack (NYSE: RSH) Raised to Overweight at Barclays.
Sterling Bancshares (NASDAQ: SBIB) Raised to Outperform at Oppenheimer.
Visa Inc. (NYSE: V) Raised to Outperform at Baird.

You can sign up for our free daily email to hear more news on key analyst calls, top day trader alerts, mergers and acquisitions, Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

There were actually a few Morgan Stanley upgrades in the broader call as well.  PMC-Sierra (NASDAQ: PMCS), QLogic (NASDAQ: QLGC), Lam Research (NASDAQ: LRCX) and Xilinx (NASDAQ: XLNX) were all raised to Overweight.

JON C. OGG

Altera (ALTR) Cut to Underweight at Morgan Stanley.
Applied Micro Circuits (AMCC) Cut to Underweight at Morgan Stanley.
ASML (ASML) Cut to Neutral at Goldman Sachs.
Broadcom (BRCM) Raised to Overweight at Morgan Stanley.
Lattice Semiconductor (LSCC) Cut to Underweight at Morgan Stanley.
Marvell Tech (MRVL) Raised to Overweight at Morgan Stanley.
MEMC (WFR) Raised to Equal Weight at Morgan Stanley.
Micron Technology (MU) Raised to Overweight at Morgan Stanley.
PMC-Sierra (PMCS) Cut to Equal Weight at Morgan Stanley.
STMicroelectronics (STM) Raised to Buy at Goldman Sachs.
Xilinx (XLNX) Cut to Underweight at Morgan Stanley.

JON C. OGG

The more important stock in the chip space today is Broadcom Corp.(NASDAQ: BRCM).  First Call has estimates at $0.27 EPS and $1.07billion in revenues.  Estimates for next quarter are $0.17 EPS and$953.14 million in revenues.  We would expect that Broadcom gets a bitmore conservative in its outlook and in the degree it willing to go outon a limb just like its peers have.  First Call has estimates nextquarter as $0.17 EPS and $953.14 million.  Analysts have already backedoff of forward numbers, so the bar is already set low here.  Shares are down 5.5% at $17.30 early in the afternoon, and the 52-weektrading range is $12.98 to $29.91.  A lot of how the reaction will beis likely to key off of how the company signals its own slow down aheadlike its peers are seeing.  Unless Marvell, Qualcomm, TexasInstruments, and other big players have all been sandbagging themselvesjust to avoid the appearance of opulence, then you know that cautionwill likely prevail.

Rambus Inc. (NASDAQ: RMBS) is going to be a very hard one to judge,because traders are going to have to listen to what the company saysabout its recent lawsuit loss and then try to plug in the negatives onhow it will affect earnings in the quarters ahead.  Top top it off,this active and volatile stock has a very limited analyst followingbehind it.  In fact, First Call has no big name firms in the stock.  Itis just a question of how wide losses will be.  This one got killedrecently, and at $9.06 its is in the lower reaches of its $4.95 to$26.41 over the last 52-week trading range.

Integrated Device Technology Inc. (NASDAQ: IDTI) has lost much of itsimportance or at least lost how it impacts the sector.  But it is alsoone of the under the radar players that is expected to remainprofitable.  The maker of mixed-signal semiconductor solutions for thecommunications, computing, and consumer industries is expected to postearnings of $0.14 EPS on $166.6 million in revenues.  For next quarterthe estimates are $0.09 EPS on $148.2 million in revenues.  With sharesdown 6% at $5.48 today, its 52-week trading range is $4.17 to $12.70.

KLA-Tencor Corporation (NASDAQ: KLAC) on the chip equipment and cap-exside of the chip business is almost impossible to get excited aboutwhen you have listened to what every company in the world has saidabout R&D and Cap-ex spending ahead.  First Call has estimates at-$0.01 EPS and $415.6 million in revenues.  And for next quarter,consensus is -$0.07 EPS and $347 million.  The estimates forFiscal-June-2009 are only $0.21 EPS and $1.64 billion in revenues.  Sothe only question is this… "Analysts gone so negative, so whathappens if they ac tually post a profit?"….  As $18.98 this is downabout 60% from last year’s high.

Maxim Integrated Products Inc. (NASDAQ: MXIM) has also been cut in justabout half from last year.  The maker of linear and mixed-signalintegrated circuits is expected to post $0.04 EPS on almost $410million in revenues.  Next quarter estimates are $0.06 EPS and $367.3million in revenues.  This one is deemed as an interchangeable stockwith Linear Tech (NASDAQ: LLTC) as far as traders are concerned.

Microchip Technology Inc. (MCHP) is an interesting one here in thespecialized semiconductor products for various embedded controlapplications.  First Call has estimates at $0.22 EPS on $188.88 millionin revenues.  For the next quarter, targets are $0.17 EPS and $174.5million in revenues.  What is interesting is that this one was raisedat Barclays to an Overweight just in the last day.  So any upside thatis less bad for the coming quarter might be greeted with cheer.  At$18.33, this is at the lower part of the $16.23 to $38.37 range of thelast 52-weeks.

PMC-Sierra Inc. (NASDAQ: PMCS) has also fallen from the importancescale over the years and is only a fraction of the value in the verylate-1990’s.  Estimates for the communications chip provider are $0.08EPS and $119.65 million in revenues.

Varian Semiconductor Equipment Associates Inc. (NASDAQ: VSEA) is beinghit rather hard today with an 11% drop to $18.98.  It too has been cutin more than half this last year.  It is in the semiconductorprocessing equipment used for fabricating integrated circuits.  FirstCall sees a loss at -$0.12 on $107.9 million for this last quarter.  Itis expected to be even lower for the quarter ahead with earnings (well,losses) at -$0.15 EPS on $90.9 million in revenues. 

Keep in mind that some of these estimates may have changed at the lastminute.  All EPS projections are on a non-GAAP basis.  We also did notinclude the "layoff expectations" from each company, but the sad partis that you have to know more layoffs in the sector are coming.  It hasalmost become cool for companies to cut workers, cap-ex, R&D, andcost structures.  Of course hard times call for hard measures, but youget the idea.

Today should mark the apex of chip earnings for this earnings season.

Jon C. Ogg
January 29, 2009

• Aruba Networks (ARUN) Raised to Neutral from Sell at Goldman Sachs.
• PMC-Sierra (PMCS) Raised to Buy at Goldman Sachs.
• Riverbed Tech (RVBD) Raised to Neutral at UBS.
• Altera (ALTR) Cut to Sell at Goldman Sachs.
• Ctrip.com (CTRP) Cut target to $45 from $62 at Goldman Sachs.
• Parametric Tech (PMTC) Cut to Neutral at Piper Jaffray.
• SonicWALL (SNWL) Cut to Neutral at Baird.
• Xilinx (XLNX) Cut to Neutral at Goldman Sachs.

Jon C. Ogg
October 29, 2008

Usually a stock is affected because its industry is being pushed underwater, as has happened with the mortgage fiasco, or because of several bad decisions by management which simply do so much damage that shareholders hit the exits

We have listed ten companies which could fall by more than half next year. For each one we have given specific reasons. These are the issues that Wall St. has to debate when it considers whether these firms will face significant sell-offs.

Citigroup (C). It would be nice to think that Citi has already taken as much of a beating as it can. The stock has fallen from $57 to $31 this year. Now, could it go to $15? Moody’s recently downgraded Citi saying that it believed that the bank could post more net losses next year. The firm still has a $200 billion mortgage book. Citi might also have to cut its dividend to raise cash. That could make it a much less attractive investment, at least short-term. A deep recession or more trouble in the mortgage-backed securities market could halve Citi’s shares.It has happedned to the bank before three times in the last 35 years, most recently in 1990.

Baidu (BIDU) The Chinese search engine is well ahead of its top rival, Google (GOOG) in the world’s most populated country. That may be why the company’s shares have jumped from under $100 in April to $356. But, Baidu trades at 62 times sales. Google trades at 14 times. Baidu is so high because Wall St. expects online search to become the next big thing in China. But, right now that is not the case. Baidu’s revenue in the third quarter was $66 million. That was double the year before, but is still a tiny number. The Chinese company faces two challenges. One is that Google is going to do whatever it can to take share from Baidu. The US company can’t afford to be a distant second in a market as large as China Baidu has been helped by the fact that the Shanghai Composite is up almost 120% in the last year. If there is a big sell-off in China stocks, Baidu will get pulled down as well.

Journal Register (JRC) This company is probably weaker than most other newspaper chains. It trades at $2.25, down from its 52-week high of $7.76. The company’s operating income is shrinking because of the fall-off of newspaper advertising. In the last quarter, Journal Register had operating income of $17.6 million and interest expense of $10.7 million. Based on newspaper industry trends, the company’s revenue could drop another 8% next year. That means debt service could become a problem.

Ford (F) Ford is a turnaround which almost happened. The company brought in a new CEO and he was able to cut costs. The latest UAW contract should pare Ford’s annual costs by as much as $2 billion. This takes $23 billion in liabilities off Ford’s books. And, the company will pay $13.2 billion into the new UAW benefits fund. Ford’s problem is that it keeps losing sales. The company’s domestic unit sales dropped 12 consecutive months through October and made a small recovery in November. Ford now has about 15% share in the US market. Aside from the fact that Ford’s piece of the pie could keep shrinking, forecasters predict that US car and light truck sales could fall from just over 16 million units this year to 15.5 million next year. In a deep recession, that number could go below 15 million which would take about $25 billion in revenue out of total domestic vehicle sales. Ford’s shares are at $6.79, near a 52-week low, and the company only has a market cap of $14.3 billion.

VMWare (VMW) Almost everyone expects that VMWare shares will be up next year. The company owns the virtualization solutions market which can help servers run much more efficiently, saving enterprises substantial sums of money. After its IPO. the stock moved from $51.50 and peaked at $125.25. It trades at just over $86 now, which indicates that it already may be vulnerable to selling pressure. With a forward P/E of 74, maybe it should be. The market for VMW’s products could slow, but that is unlikely. One securities analyst recently pointed out that VMWare sells software licenses which involve large upfront purchases. That might hurt revenue in future years. And, Microsoft (MSFT) is coming to market with its own virtualization technology, which it calles Hyper-V. The product could be a bust, but Redmond does have a huge foot in the server door with it Windows platform.

Countrywide Financial (CFC) The shares are already down to $9 from a 52-week high of $45.26. This is the most visible casualty of the mortgage mess. The housing market could still sink the company. Nearly half of the firm’s portfolio is backed by California property. If foreclosures continue to spike and the values in the housing market plummet further, Countrywide simply does not have the capital to weather another full year in this climate. Just count the defaults. If they get too high, CFC may not make it. Zacks and Citigroup recently issued negative research comments about the company.

Bidz.com (BIDZ) The company has been in a running fight with research firm Citron. The fight includes claims that that the company’s inventory levels are rising at least 300% higher than the company’s revenue run rate. The company recently reported a good third quarter with net revenue of $40.1 million, a 48% increase compared with $27.1 million reported for the third quarter of 2006. Barron’s has pointed out that short sellers are going after the company and will do whatever they can, within the boundaries of fair play, to keep the shares moving lower. Wall St. is clearly worried. The stock had a 52-week high of $22.50 and now trades at $8.56. There is a lot of evidence that online spending has not been as good as expected this holiday season. Audience research firm Alexa actually shows Bidz traffic falling from early November to mid-December.

Micron Technology (MU) The company has already lost close to half its value in the last year, with the stock going from a 52-week high of $14.31 to $7.82. The firm’s core business in memory chips is being seriously affected by sharply falling prices. Jefferies & Co recently made negative comments on MU and revised revenue down and losses up. The price cutting in the NAND and DRAM markets is furious now. MU needs reasonable operating income to fund R&D. That may not happen. With product pricing in some of its key markets down 40%, 2008 could be a very poor year.

LDK Solar (LDK) A former employee reported that the company had inventory problems. This crashed the shares and they moved from $74 in September to $27 in late November. An audit determined that there was no inventory problem and the shares moved back over $68. Several analysts think the news is a little too good. Goldman Sachs has a "sell" on the stock with a price target of $33. The investment house thinks that the company is giving away a lot of margin to get long-term contracts. CIBC also has a "sell" rating on the shares. LDK has additional market risk. Its shares are up, to some extent, because of the huge increases in the prices of most Chinese stocks. If there is a sell-off in Shanghai or Hong Kong, odds are that the stock goes out with the tide

PMC-Sierra (PMCS) The designer and marketer of communications semiconductors has not been doing well. Shares have dropped from a 52-week high of $9.83 to the current $6.76. Banc of America Securities recently rated the stock as a "sell". Short interest in the company rose sharply at the end of November. When the company released its third quarter results, the CEO announced that he would be leaving. In that quarter, revenue was flat at just over $117 million. Net income was a negative $5.9 million. PMC’s great risk is that spending in the telecom industry is slowing. If build-outs of new technology like 3G wireless continue to decelerate into 2008, the company can do little to find new revenue. With other struggling companies like Conexant (CNXT) in the same market, price cutting is a part of the business.

Douglas A. McIntyre

• Biogen Idec (BIIB) raised from Underperform to Neutral at Credit Suisse.
• BMC Software (BMC) raised from Neutral to Outperform at    Credit Suisse.
• Capitol One (COF) downgraded from Buy to Hold at Jefferies.
• Clean Energy Fuels (CLNE) started as Strong Buy at Broadpoint Capital.
• First Solar (FSLR) started as BUY at UBS.
• Plantronics (PLT) downgraded from Neutral to Underweight at J.P.Morgan.
• PMC-Sierra (PMCS) started as Sell at Banc of America.
• Red Hat (RHT) downgraded from Buy to Neutral at Banc of America.
• SLM Corp. (SLM) raised to Outperform at at Keefe Bruyette Woods.
• Washington Mutual (WM) downgraded from Neutral to Sell at Banc of America.

Jon C. Ogg
December 13, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Jon C. Ogg
October 19, 2007

PMC-Sierra simultaneously announced that Bob Bailey will be retiring as president and chief executive officer once a replacement has been named. He will remain chief executive officer in the meantime.

This saw shares rise more than 1% at $9.02 in normal trading.  In after-hours the stock is actually up 2.5% at $9.25.  The 52-week trading range is $6.06 to $9.27, so it is flirting with year highs.  This may be up significantly from the $5.00 lows of 2006, but shares were north of $20.00 at the end of 2003 and earky 2004.

Without guidance and with a retiring CEO (who is only around 50-years old) the verdict is still pending here. 

Jon C. Ogg
October 18, 2007