Needham downgraded Rudolph Technologies (RTEC) to hold from buy.
Analyst Cristina Osmena says Rudolph's dominant share of the metal film metrology market, which is geared to the chip industry, may see competitive encroachment. She says tepid sales of metal film thickness tools may indicate film thickness control may not be a critical issue in ramping copper yields. She says the 2 cents second-quarter earnings per share is 2 cents better than she expected on lower operating expenses. Revenue was in line with her estimates.
Osmena notes the book-to-bill ratio is below the industry average. She says unlike peers, Rudolph didn't provide a positive third-quarter order outlook. She says the guidance is disappointing, and Rudolph is fully valued.
She cut the 11 cents 2003 earnings per share estimate to 9 cents, and cut the 58 cents 2004 earnings per share estimate to 45 cents.