WFR

[la-onda]

Time for reentry??

Profile:
MEMC Electronic Materials, Inc. produces wafers for the semiconductor industry worldwide. Its products include prime polished wafers, such as OPTIA and annealed products; epitaxial wafers consisting of thin silicon layer grown on the polished surface of the wafer; and test/monitor wafers for testing semiconductor fabrication lines and processes. The company�s products are used in the manufacture of various semiconductor devices, including microprocessor, memory, logic, and power devices. Its customers comprise semiconductor device manufacturers, including the memory, microprocessor, and applications specific integrated circuit manufacturers, as well as foundries.

Factsheet:
http://media.corporate-ir.net/media_files/IROL/10/106680/IRfactsheet.pdf

Latest news:
MEMC Reports First Quarter Results
ST. PETERS, Mo., April 26 /PRNewswire-FirstCall/ -- MEMC Electronic Materials, Inc. (NYSE: WFR) today reported financial results for the quarter ended March 31, 2007.
Summary of first quarter results:
     -- Net sales of $440.4 million
     -- Gross margin of $222.5 million (50.5% of net sales)
     -- Operating income of $187.7 million (42.6% of net sales)
     -- Cash and short-term investment balances of $838.1 million

The company reported first quarter net sales of $440.4 million, which represents an increase of 4.7% from the fourth quarter 2006 level of $420.5 million. Gross margin in the quarter was $222.5 million, or 50.5% of net sales, compared to $203.3 million, or 48.3% of net sales, in the 2006 fourth quarter. Operating expenses totaled $34.8 million in the quarter, or 7.9% of sales, compared to $34.7 million, or 8.2% of sales, in the fourth quarter. Operating income in the quarter was $187.7 million, or 42.6% of net sales, compared to $168.6 million, or 40.1% of net sales, in the fourth quarter. Non- operating expense in the quarter includes a non-cash charge of $1.1 million, reflecting the required end of period valuation of the Suntech warrants.
Using an estimated effective cash tax rate of 15%, non-GAAP net income for the first quarter of 2007 was $164.3 million and non-GAAP diluted EPS was $0.71. Net income for the first quarter, using a book tax rate of 30.2%, was $134.7 million and GAAP diluted EPS was $0.58. Both GAAP and non-GAAP EPS figures include $7.4 million in pre-tax stock compensation expense and a $1.1 million pre-tax charge relating to the Suntech warrants. See non-GAAP reconciliation information at the end of this press release following the financial statement tables.
During the first quarter, the company generated operating cash flow of $214.5 million, or 48.7% of sales. Capital expenditures for the quarter totaled $47.9 million, or 10.9% of sales. Free cash flow (operating cash flow minus capital expenditures) was $166.6 million or 37.8% of sales. MEMC ended the first quarter with cash and short-term investments of $838.1 million, compared to $585.5 million at the end of the prior quarter. Cash balances include an additional security deposit made by a long-term supply agreement customer of $66 million.
Commenting on the company's performance, Nabeel Gareeb, MEMC's Chief Executive Officer said, "We are pleased to have grown revenue by almost 5% over the previous quarter, despite some semiconductor application areas being weaker than anticipated. Solar demand, however, remained healthy."
"In addition to revenue growth in the first quarter," continued Gareeb, "the company continued to improve margins, generate high levels of free cash flow, and further improve its already strong balance sheet. Cash and short- term investments grew by 43% over the previous quarter to over $838 million, while total debt remained flat at $35 million."
"During the quarter, the company commenced its first shipments of solar wafers. This marks an important milestone for MEMC as we introduce this new product line given our 50 years of experience in making wafers."

Second Quarter 2007 Outlook

"Although the demand environment for some of our semiconductor customers is improving compared to a soft first quarter, the wafer inventory recovery seems to be lagging that improvement a bit because of their days of inventory; in addition, other customers seem to have remnant inventory issues from the holiday season. Demand from the solar market, however, continues to be healthy. Based on these customer indications, we are targeting revenues of approximately $460-$470 million for the second quarter. We are also targeting margins to improve by approximately 100 basis points compared to the first quarter, with operating expenses between $36-$37 million," concluded Gareeb.

Analysts update:
WFR

Notable Calls submits: Plenty of comments on MEMC Electronic Materials (NYSE:WFR) after in-line results and guidance disappointed the market:

- Citigroup says the story is not over yet, but margin for error is closing fast - Given WFR's leverage to the poly spot market, it's probably not over here until poly spot prices begin to moderate - unlikely near-term. That said, near-term risk heightened as guidance may not be as conservative as it looks b/c they think obligations to STP may prevent WFR from relying as heavily on a strong spot market in CQ2. Firm maintains Hold rating, tgt goes from $48 to $60 on shift to sum-of parts.

- Friedman, Billings, Ramsey notes that although reporting in line with guidance (1Q) and guiding to consensus (2Q) is not really a "miss," they still find the report/guidance disappointing since the company had "upsided" the guidance/consensus in the past four quarters.

Firm also wonders what it would take for the company to disclose more, when most other competitors do. To that extent, they note that, if MEMC's semi wafer customers are not ordering because they have sufficient inventory (for now), why is MEMC not able to sell the incremental poly (that otherwise would have been used to make the semi wafer) into the spot market?

- JP Morgan says MEMC is likely to reduce solar polysilicon sales in order to keep up with wafer demand. Firm expects this elasticity between polysilicon demand and wafer demand to exist throughout C07 leading to additional tightness in the polysilicon mkt and eventually to upside to pricing.

http://chip.seekingalpha.com/article/33800?source=feed

Upgrades please check attachments!
Chart & attachment

[la-onda]

 
(from Barrons)
Jeffrey Bencik, Jefferies & Co.: Reiterate Buy rating, and raise target to $80 from $60. Raised estimates to $3.12 from $3.02 for this year, and to $3.96 from $3.87 for next year.

April 27, 2007, 12:59 pm
MEMC Shares Stumble After Q1 Results; Credit Suisse Downgrades, But Others Still Bullish
Posted by Eric Savitz

Not a good day for MEMC Electronic Materials (WFR). Shares of the silicon wafer maker have tumbled following yesterday's first quarter earnings report. Adding to the pressure on the shares, Credit Suisse's Satya Kumar this morning dropped his rating on the stock to Neutral from Outperform.

Kumar sees the company's production of polysilicon - the raw material used to make silicon wafers used by the semiconductor and solar sectors - ramping sharply in the second half. And he sees poly silicon prices topping $200/kg through the third quarter. But he sees the "extent of upside surprises moderating without a sharper ramp in capacity."

Kumar says he worries that polysilicon can slip into over-capacity as soon as the first quarter of next year. He notes that a year ago there were only about 10 companies making polysilicon; he says there are over 60 companies trying to make the stuff today. "This large increase in competitors permanently distorts [the] competitive landscape," he writes. Kumar leaves his price target on the stock at $64.

Stephen Chin, an analyst at UBS, wrote in a note today that there were three reasons the company did not deliver upside to its March sales report:

* A fire at solar wafer outsourcing partner Green Energy had a worse than expected impact, but now it back up and running.
* Lower resale of polysilicon that MEMC purchased on the merchant market.
* Lower than expected semiconductor wafer sales due to weakness at foundry and analog partners (who should rebound in the current quarter.)

Other commentary on the stock today is mixed. Here are a few excerpts.

Bears say, it's wafer thin:

* Mehdi Hosseini, Friedman Billings Ramsey: Although reporting in line with guidance and guiding to consensus is not really a miss, we still find the report/guidance disappointing since the company had "upsided" the guidance/consensus in the past four quarters.


Bulls says, have a wafer:

* Tim Luke, Lehman: While it is evident that an inventory correction in the semis space limited upside this quarter, with particular weakness in PC and analog, MEMC exhibited its ability to successfully shift capacity to more opportunistic markets when needed, improving visibility on the company achieving its financial targets for this year - we do not see risk the company's full year guidance of revenues of $1.9 billion and EPS above $3...we would use any weakness as an opportunity to acquire the shares.
* Christopher Blansett, J.P. Morgan: We believe long-term growth is intact as solar demand remains high for the foreseeable future and semi demand picks up into [the second half]. We're sticking with MEMC and suggest buying on weakness.
* Jeffrey Bencik, Jefferies & Co.: Reiterate Buy rating, and raise target to $80 from $60. Raised estimates to $3.12 from $3.02 for this year, and to $3.96 from $3.87 for next year.
* Krishna Shankar, JMP Securities: Repeats Market Outperform rating and $75 target. We recommend accumulation of the stock on weakness.

[422fwhp]

I stopped trying to call the bottom...I found I wasn't very good at it 

[la-onda]

down on huge volume again, just on my watchlist

[yukiii]

looks like a buy here hit a low at $52

[TerryG]

The crux of the downgrade because of the semiconductor industry is that the year over year growth has been flattening and not increasing. Meaning semiconductors are leveling to a more sustainable growth rate. Which stopped driving demand for wafers. Growth is expected to be level until about 2010. Hence the pullback.

[la-onda]

WFR: Friedman Ups to Outperform from Mkt Perform; Ups Tgt to $75 vs $56; Analyst Notes
Wednesday, May 09, 2007 08:14ET
Issuer: MEMC Electronic Materials, Inc. (NYSE: WFR)
Analyst Firm:  Friedman Billings Ramsey Group Inc.
Ratings Action: UPGRADE
Current Rating: Outperform (from Mkt Perform)
Target Price Action: INCREASE
Target Price: $75.00 (+33.93% from $56.00)

Analyst Comments: The firm based their recommendation on the following factors: are:
1) manufacturing issues that, in our opinion, prevented WFR from delivering upside to its 1Q revenue guidance are believed resolved and behind;
2) acceleration of semi wafer and poly capacity ramps, especially in 2H, will help acceleration of quarterly revenue growth;
3) a rebound in semi wafer demand should also help with item #2;
4) increased conviction regarding an announcement of additional solar wafer contracts currently believed to be in the pipeline;
5) expected sale of remaining TPG shares in the near future (following lockup expiration on May 7);
6) the recent 12% sell-off following 1Q report.

[la-onda]

fyi:
MEMC Electronic Materials "buy," target price reduced - update

Tuesday, July 17, 2007 4:36:25 PM ET
UBS

NEW YORK, July 17 (newratings.com) - Analysts at UBS reiterate their "buy" rating on MEMC Electronic Materials (WFR.NYS), while reducing their estimates for the company.
The target price has been reduced from $80 to $77.

In a research note published this morning, the analysts mention that checks indicate that the company's 2Q07 revenues are in-line with the guidance of $460-$470 million. According to the latest industry research, one of MEMC Electronic Materials' rivals is gaining share in the 200mm semiconductor wafer market in Taiwan and China with aggressive pricing and Intel is expected to close three-to-four of its 200mm fabs over the upcoming 18 months, the analysts say. Channel checks also indicate that bidding on 300mm semiconductor wafers for Qimonda's new partner fab in Taiwan is 10% lower than the average prices in 2Q07, UBS adds. The EPS estimate for FY08 has been reduced from $4.10 to $3.90.

[la-onda]

update:

MEMC Electronic Materials "neutral," target price raised

Friday, July 27, 2007 8:44:35 AM ET
Credit Suisse

NEW YORK, July 27 (newratings.com) - Analyst S Kumar of Credit Suisse maintains his "neutral" rating on MEMC Electronic Materials (WFR.NYS), while raising his estimates for the company. The target price has been raised from $64 to $71.

In a research note published yesterday, the analyst mentions that the company has reported its 2Q revenues and EPS ahead of the consensus. MEMC Electronic Materials has raised its EPS guidance for the full year to $3.30, ahead of the estimates and the consensus. MEMC Electronic Materials' poly expansion is progressing ahead of the plan and the company is increasing shipments to solar business with higher margins, the analyst says. The EPS estimates for 2007 and 2008 have been raised from $3.24 to $3.35 and from $3.81 to $4.19, respectively.

&

MEMC Electronic Materials "market outperform," target price raised

Thursday, July 26, 2007 12:17:58 PM ET
JMP Securities

NEW YORK, July 26 (newratings.com) - Analysts at JMP Securities reiterate their "market outperform" rating on MEMC Electronic Materials Inc (WFR.NYS). The target price has been raised from $75 to $80.

[la-onda]

update:

WFR: Thomas Weisel Starts @ Overweight; Sets Tgt @ $78; Analyst Notes
Wednesday, August 15, 2007 07:49ET

Issuer: MEMC Electronic Materials, Inc. (NYSE: WFR)
Analyst Firm:  Thomas Weisel Partners
Ratings Action: INITIATE
Current Rating: Overweight
Target Price Action: INITIATE
Target Price: $78.00
Analyst Comments: The firm continues to see upside to near-term estimates from change in mix from semiconductor wafers toward solar wafers and polysilicon sales. They believe investors are underestimating the impact from this shift.

&

MEMC Electronic Materials "market outperform," target price reduced
Wednesday, September 05, 2007 7:39:54 AM ET
JMP Securities
NEW YORK, September 5 (newratings.com) - Analyst Krishna Shankar of JMP Securities maintains his "market outperform" rating on MEMC Electronic Materials Inc (WFR.NYS), while reducing his estimates for the company. The target price has been reduced from $80 to $75.

In a research note published yesterday, the analyst mentions that the company has reduced its revenue guidance for F3Q07 by 5% on account of power supply outage. Although the power outage is unlikely to impact MEMC Electronic Materials longer-term growth plans, it underlines the company's vulnerability to the weather-prone Texas Gulf Coast, the analyst says. The EPS estimates for FY07 and FY08 have been reduced from $3.35 to $3.25 and from $4.27 to $4.10, respectively.

[la-onda]

MEMC Offers Updated 3Q Guidance
Monday , September 10, 2007 22:57ET

Dublin, Sep 10, 2007 (M2 PRESSWIRE via COMTEX) -- MEMC Electronic Materials has provided an update to its third quarter financial targets.

The company reported that mid-last week, a construction incident caused by one of its electrical subcontractors working on the Pasadena, Texas, polysilicon facility expansion resulted in a power outage to the entire site. Although the power was eventually restored later the same day, the unplanned and abrupt shutdown of high temperature and pressure chemical operations caused considerable complications. The facility is now in the late stages of recovery, but the abrupt nature of this incident, combined with the rain and thunderstorms in Pasadena, Texas over the last few days, has hampered the facility's ability to recover operations expeditiously. This disruption has also caused the on-going polysilicon expansion project at the site to be additionally delayed. The combined effect of these events has resulted in an approximate one week impact to the company's output for the quarter.

As a result, the company is revising its Q3 guidance. Specifically, the company is now targeting revenues to be approximately 5 percent below the previously targeted level of $500 million and margins to be approximately flat sequentially from second quarter 2007 levels due to the associated costs.

"It is unfortunate that this incident occurred, but we are glad that all of our employees and contractors are safe, and that we are recovering in a steady fashion," said Nabeel Gareeb, the company's president and CEO. "Given the circumstances, we are pleased that we should be able to limit the impact on the third quarter to about 5 percent of our original revenue projections. Despite the short-term effects on our third quarter results, we do not expect this discrete incident to have any affects on our year-end or long-term targets for capacity expansion. We are working diligently to recover from this unfortunate event, and will be working with our customers to minimize any potential impacts on their supply chain. We believe we will have an opportunity to recover some of this lost production in the fourth quarter and thereby potentially reduce the impact on the full-year targets. The specific quantification of this potential recovery will not be available until after the end of this quarter, and will therefore be provided when we report our third quarter earnings results," concluded Gareeb.

MEMC is a global comany in the manufacture and sale of wafers and related intermediate products to the semiconductor and solar industries. MEMC has been a pioneer in the design and development of wafer technologies over the past four decades. With R&D and manufacturing facilities in the U.S., Europe and Asia, MEMC enables the next generation of high performance semiconductor devices and solar cells.

[la-onda]

MEMC Electronic Materials (WFR) NewsBite - WFR Rallying on SunPower $190M Agreement
Wednesday, November 28, 2007 01:44ET

Nov 28, 2007 (Fresh Brewed Media via COMTEX) -- MEMC Electronic Materials Inc. (WFR) opened at 68.93. So far today, the stock has hit a low of 68.93 and a high of 73.72. WFR is now trading at 73.37, up 5.09 (7.38%). The stock hit its 52 week high of 83.00 in November and set its 52 week low of 37.30 in November. WFR has been moving upwards for the past year. Shares of solar-power stocks have been rallying today lifted by SunPower Corp. (SPWR) which announced it got a major contract and a $190 million financing agreement. Technical indicators for the stock are bullish but slightly deteriorating while S&P gives WFR a very positive 5 STARS (out of 5) strong buy rating

chart update:

[bjc]

I like this one a lot.  I think it deserves a far higher multiple than teens?

Completely unrelated but i don't want to start a new thread and I haven't heard anything about it on this board before - MICC.  Telecom co. that services argentina and mexico and others I believe.  Looks very cheap relative to growth.  Would like to look for a dip to buy on though, right near 52 week high.

[BigSully1]

I like this one a lot.  I think it deserves a far higher multiple than teens?

Completely unrelated but i don't want to start a new thread and I haven't heard anything about it on this board before - MICC.  Telecom co. that services argentina and mexico and others I believe.  Looks very cheap relative to growth.  Would like to look for a dip to buy on though, right near 52 week high.

Bjc, I was going to start a thread on MICC but setravis had already started a thread on it on Nov 29. You can find it that way, I think on page 3 of stock picks. They had an excellent ER. For some reason MICC doesn't come up in a thread search. A couple other of other of his thread starts don't/didn't show in search either.

[la-onda]

nice breakout on news:
MEMC CEO Gareeb Notes Rising Spot Market Demand For Polysilicon; Sees Sold Semi Orders; Stock Jumps
Posted by Eric Savitz
MEMC Electronic Materials CEO Nabeel Gareeb told investors at the Lehman tech conference in San Francisco today that demand trends from semiconductor customers is solid and that polysilicon pricing has been trending higher through the fourth quarter, driven by solar.

Lehman semi analyst Tim Luke reviewed his remarks in a brief research note. Luke says he believes estimates are conservative; he repeated his Buy rating on the stock. According to Luke, Gareeb said that about three weeks ago his sales force saw a significant increase in phone calls from solar photovolatic companies seeking polysilicon supply. He adds that Gareeb indicated many of those companies were willing to pay elevated spot prices to support their sales projections.

"In fact, in light of recent lawsuits that have been brought against solar companies who do not have supply agreements to support their guidance," Luke writes, "polysilicon manufacturing companies who have supply are strongly positioned for [the fourth quarter] as it is now mandatory for solar companies to have contracted/or spot poly to support their guidance (or face a potential lawsuit)."

He says the other potential implications from this are that new entrants into the polysilicon manufacturing market are experiencing challenges ramping incremental polysilicon supply, or that the quality of new supply is insufficient.

Luke says that since MEMC did not expect much spot market demand when they provided guidance, there could be upside to revenue estimates and margins since ASPs for spot market polysilicon are running much higher than contract prices (About $350/kg for the spot market, $150 on a contract basis.)

Concludes Luke: "We would be buyers of the stock into the quarter as this will likely bode well for MEMC's fundamentals - we do not believe the company factored this into guidance when they provided it during their 3Q07 update."

Meanwhile, Mehdi Hosseini, an analyst with Friedman Billings Ramsey, this morning repeated his Outperform rating on the company, asserting that fourth quarter results are tracking to the high end of guidance. He says that ASPs for semiconductor wafers have been weak, with some manufacturers lowering prices for 300 mm wafers to gain market share. But he adds that the strong spot market demand for polysilicon in the solar market should offset the semi weakness. He also says that the company has begun to sell solar wafers into the spot market

MEMC today is up $2.44, or 3.2%, at $78.80.