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Are investors ready for IPOs with profits?

Six companies that are planning to launch initial public offerings this week are profitable--a rarity during the go-go days of the IPO frenzy.

    Six companies that are planning to launch initial public offerings this week are profitable--a rarity during the go-go days of the IPO frenzy that indicates a new-found fickleness by investors.

    The profitable companies are among 14 IPOs planned for this week that could raise a total of $3.2 billion. The busy calendar follows a holiday-shortened week during which InfoVista, which began trading Friday, was the sole company to hold its IPO.

    "The dynamics of the IPO market have been changing to some extent," said Paul Bard, an analyst with Renaissance Capital. "What you're seeing now is more and more profitable companies. Not too long ago that was more of an exception rather than the rule. It used to be they were mostly early-stage dot-com companies that didn't have any profit."

     IPOs on tap
    Axcelis Technologies
    Ticker: ACLS
    Business: chip equipment
    Web site: www.axcelis.com
    Lead underwriter:
      Goldman Sachs
    Pricing range: $20-$22
    Recent chip equipment news

    Entegris
    Ticker: ENTG
    Business: chip equipment
    Web site: www.entegris.com
    Lead underwriter:
      Merrill Lynch
    Pricing range: $13-$15
    Recent semiconductor news

    Triton Network Systems
    Ticker: TNSI
    Business: wireless broadband equipment
    Web site: www.triton-network.com
    Lead underwriter:
      Credit Suisse First Boston
    Pricing range: $10-$12
    Recent wireless news

    Network Engines
    Ticker: NENG
    Business: server appliances
    Web site: www.networkengines.com
    Lead underwriter:
      Donaldson Lufkin
    Pricing range: $13-$15
    Recent server appliance news

    For more IPO information, see CNET Investor
    *price information may change

    Axcelis Technologies is one of three profitable semiconductor-related companies to schedule IPOs this week. The IPO will coincide with Semicon West, the chip equipment industry's largest trade show, which will be held all week in San Jose and San Francisco.

    The IPOs also come at a time when the stocks of many chip companies and the firms that make the machines used to manufacture chips are riding high on Wall Street.

    "Demand is very high right now," Bard said.

    Beverly, Mass.-based Axcelis, which makes ion implantation equipment used in the fabrication of semiconductors, plans to raise $302 million through the sale of 15.5 million shares at a range of $20 to $22.

    Axcelis, a subsidiary of industrial equipment maker Eaton, posted a profit of $19 million on revenue of $143 in the first quarter. The company has applied to trade on the Nasdaq under the ticker "ACLS" and will have a market value of about $2 billion after the IPO. Goldman Sachs is the lead underwriter.

    "I really think that Axcelis is going to be the best offering in the coming week," Morningstar analyst George Nichols said. "They're highly profitable, and their sales growth is really rapid."

    Entegris is another semiconductor-related company scheduled to debut this week. The Chaska, Minn.-based company, which makes transport products used in the production of semiconductors, plans to sell 8.6 million shares at a range of $13 to $15. Initially, the company was scheduled to trade Friday, but it will now price its stock today.

    Entegris reported $11 million in profit in the first quarter on revenue of $85 million, according to Renaissance Capital. The company has applied to trade on the Nasdaq under the ticker "ENTG" and will have an estimated market capitalization of $1 billion after its offering. Merrill Lynch will handle the sale.

    ASAT Holdings, a Hong Kong-based company that makes protective housing for semiconductors, plans to sell 20 million shares at a range of $11 to $14. Last year, the company earned $49.5 million on revenues of $312 million. The company has applied to trade under the ticker "ASTT" and will have an estimated market capitalization of $1.7 billion after its sale. Chase Hambrecht & Quist will handle the sale.

    Outside of the Tune in to CNET News.com TV's IPO
Forecast semiconductor industry, Sunrise Telecom is one of the deals that could garner investor attention. The San Jose, Calif.-based maker of DSL (digital subscriber line) testing products plans to raise $57.5 million through the sale of 4 million shares at a range of $11 to $13.

    Sunrise Telecom has posted profits for the past five years, earning $2.8 million in the first quarter of 2000 on revenues of $19 million. After its IPO, Sunrise will have an approximate market value of $617 million. The company will trade on the Nasdaq under the ticker "SRTI." Chase H&Q will handle the sale.

    Triton Network Systems, a maker of broadband wireless equipment that allows for high-speed Internet access, plans to raise $54.5 million through the sale of 5.5 million shares at a range of $10 to $12.

    "Triton has created a sort of wireless ring comparable to the way fiber networks are constructed," Bard said. "They call it 'invisible fiber'; they're providing very high-speed redundant access by structuring it in a ring." The company is targeting network providers, or big carriers, he said.

    The Orlando-based company lost $10.9 million in the first quarter of 2000 on revenues of $3.5 million. Triton, which has applied to trade on the Nasdaq under the ticker symbol "TNSI," will have a market capitalization of about $378 million after its IPO. Credit Suisse First Boston is the lead underwriter.

    Network Engines, which develops server appliances that online companies can use for Web hosting, plans to raise $77 million through the sale of 5.5 million shares at a range of $13 to $15.

    "They're in a really hot market. But because they're unprofitable and they're going to come out with a really high valuation, I think it's a risky investment," Nichols said.

    Network Engines lost $10 million in the six months ending March 31, on revenues of $10 million. The company will trade on the Nasdaq under the symbol "NENG." Donaldson Lufkin & Jenrette will handle the sale.

    These are this week's other IPOs and their financials, according to Renaissance Capital:

    • OmniVision Technologies, a maker imaging devices used in semiconductors. The Sunnyvale-based company plans to raise $63.3 million through the sale of 5 million shares at a range of $9 to $11. It earned $2.4 million in the first quarter on revenues of $15.1 million. It will have an estimated market capitalization of $219 million and will trade under the ticker symbol "OVTI." Robertson Stephens will handle the sale.

    • Sohu.com, an Internet portal in China, plans to raise up to $85 million through the sale of 4.6 million shares at a range of $16 to $19. The China-based company lost $3.5 million in 1999 on revenues of $1.6 million. The company will trade on the Nasdaq under the ticker "SOHU" and will have an estimated $570 million market capitalization. Credit Suisse First Boston is handling the sale.

    • Turkcell, a mobile communications company, will sell 96 million American depository shares at a range of $16.50 to $20. The Turkey-based company earned $75 million in the first quarter of 2000 on sales of $479 million. The company will trade on both the New York Stock Exchange and the Istanbul Stock Market. It will have an estimated market value of $17.5 billion. Goldman Sachs and Morgan Stanley Dean Witter are co-managing the sale.

    • Divine Interventures, which invests in Internet, business-to-business and e-commerce companies, plans to raise $412 million from the sale of about 36 million shares, 14 million of which will be offered to the public at $13 to $15. The Lisle, Ill.-based company lost $47 million in the first quarter of 2000 on revenues of $5.7 million. The company will have an estimated market value of $1.8 billion. The company is expected to trade on the Nasdaq under the ticker symbol "DVIN." Robertson Stephens will handle the sale.