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Chip equipment maker surges on bullish outlook

Shares of FSI International jump in midday trading after the company holds a conference call that leads some analysts to revise earnings estimates.

Shares of FSI International jumped in midday trading after the company held a bullish conference call that led some analysts to project higher earnings estimates for the maker of semiconductor equipment.

"They indicated they are going to do a lot better in this quarter, and that their orders are very strong," said Clinton H. Morrison, an analyst with John G. Kinnard & Co. who listened in on the call. "Business is very strong. I think everybody's expectations for the company have been too conservative."

FSI shares climbed $1.63, or nearly 10 percent, to $18 in midday trading. The shares have ranged between $6.13 and $25 during the past 52 weeks.

Lehman Brothers analyst Edward White said in a report that consensus estimates of 21 cents per share, as well as his own estimates of 25 cents per share, were too low. "EPS (earnings per share) should come in at about 35 cents excluding (a restructuring charge)," he wrote.

FSI said yesterday that it would close plants in Mountain View and Fremont, Calif., and fire 40 employees, or 4.4 percent of its work force, to cut costs. The company will take a $4.1 million restructuring charge for costs associated with the plant closures.

"Their restructuring is very positive," said Morrison. "This is a very small move in the scheme of things."

FSI also said yesterday that it expects fiscal fourth-quarter orders to exceed $100 million, and that its orders for the fiscal year should be up 200 percent from the $112 million in 1999. FSI also announced a new $35 million order.

Lehman Brothers reiterated an "outperform" rating on FSI, and Needham & Co. raised its rating to "strong buy."