Cohu's (NASDAQ:COHU) GM Weakness Driving EPS Down

Cohu (NASDAQ:COHU) gave low guidance from its GM exposure, falling close to 34 percent, resulting in Needham lowering their EPS estimate on them.

Needham says, "The semi equipment orders dropped 9% Q/Q and the semi equipment book-to-bill was 0.88. Revenue guidance for Q4 was to the range of $85-90M or a 10% decline Q/Q. This is in line with our revenue estimate. However, the GM guide of flat at about 34% is below our expectation and is expected to carry thorough mid-2011. This was due to a delay in taking manufacturing steps offshore from the Poway, CA facility for mostly the Pyramid handler. We adjusted our 2011 revenue/EPS from $323M/$1.75 to $326M/$1.55 and introduced our 2012 revenue/EPS at $319M/$1.70."

Needham & Company maintains a "Buy" rating on Cohu (COHU), which closed at $15.18, losing $1.48, or 8.88 percent. Needham lowered their price target on Cohu from $21 to $20.