Robertson Stephens Daily Growth Stock Update on KLAC, AFCI, ALTR, BRCM, CMOS, DPMI, EXTR, HIFN, IMNX, ISSX, ITWO, LLTC, NEWP, PNK, SANM, SEBL, TLAB, TER, TXCC, TVLY, TSTN, AMD, AZA, CLS, CHIC, CTXS, LLY, EFX, KEYN, MRK, NETE, PFE, SEPR, SGP

Apr 19, 2001, 01:00 ET from Robertson Stephens, Inc.

    SAN FRANCISCO, April 19 /PRNewswire/ -- The following is being issued by
 Robertson Stephens, Inc.:
 
     Rating Changes:
 
     KLA-Tencor Corporation
     (Nasdaq:   KLAC) $47.08
     Buy
     F2001E EPS: $1.86, up from $1.83
     F2002E EPS: $1.26, up from $1.12
 
     Sue Billat, Semiconductor Equipment/Foundries
     "KLA posted Q3:F01 operating EPS of $0.48, beating our $0.45 estimate and
     the Street's expectations of $0.44," said Billat. "We are raising our
     revenue projection for FQ4 to $445 million (from $415 million) but
     maintaining EPS of $0.27 on lower gross margin assumptions. We are also
     raising our F02 EPS estimate to $1.26 (from $1.12) on revenues of $1.865
     billion (from $1.745 billion). We note that KLA will begin reporting under
     SAB 101 guidelines in Q4:F01 and that our estimates are not adjusted for
     this. As a major participant in key technological transitions such as
     linewidth shrinks, copper interconnect and 300 mm, we believe KLA should
     outperform the overall industry in CY02. At 24.5x our CY02 EPS estimate,
     KLAC is trading at a discount to large cap comparables. Accordingly, we
     are upgrading KLAC to a Buy from a LTA rating."
 
     Estimate Changes:
 
     Advanced Fibre Communications, Inc.
     (Nasdaq:   AFCI) $16.59
     Buy
     F2001E EPS: $0.06, down from $0.66
     F2002E EPS: $0.28, down from $0.85
 
     Paul Silverstein, Communications/Networking
     "AFC reported first quarter revenues of $82.2 million and a loss of
     ($0.06) per share, significantly below our $100.0 million and $0.12
     respective estimates," said Silverstein. "The shortfall in the quarter was
     due almost entirely to the collapse in revenues from Winstar
     Communications, which earlier in the week filed for Chapter 11 bankruptcy
     protection, and the significant decline in revenues from each of Tellabs
     and SBC. These three customers accounted for virtually the entire $18
     million shortfall versus our $100 million forecast for the quarter.  We
     are significantly lowering our revenue and EPS estimates for 2001 and 2002
     given the loss in revenues from Winstar and Tellabs and the slower-than-
     forecast roll-out of DSL off of AFC's Dmax plus and eMax plus DLC systems
     by SBC and Verizon.  While there are obviously near-term issues, we view
     AFC's business as fundamentally sound, with the significant prospective
     growth driver of DSL continuing to loom on the horizon.  With $7 - 8
     after-tax of cash on AFC's balance sheet, it would appear as if the market
     is assigning an option value to AFC's core business. While we are
     significantly reducing our EPS forecasts for fiscal 2001 and 2002, we
     believe that there is upside to our estimates and that investors have
     already priced into AFC's shares most of the above-mentioned datapoints,
     thus dampening the downside risk on these shares.  As a result, we are
     maintaining our Buy recommendation on AFC's shares."
 
     Altera Corporation
     (Nasdaq:   ALTR) $28.63
     Long-Term Attractive
     F2001E EPS: $0.45, down from $0.50
 
     Eric Rothdeutsch, Semiconductors/Computer Hardware
     "Altera reported 1Q01 EPS of $0.16, in line with consensus and $0.02 above
     our estimate," said Rothdeutsch. "Revenues of $287.4 million were down 22%
     QoQ, above our $272.3 million estimate. As a result of a continuing
     inventory correction and weakening demand across all end markets and
     geographies, we are cutting our F2001 revenue and EPS estimates from $1.05
     billion and $0.50 to $984 million and $0.45.  We are introducing our F2002
     revenue and EPS estimates of $1.07 billion and $0.45.  We are cautious on
     the company's prospects pending better visibility into the rate at which
     the company burns off its excess inventory and end market demand improves.
     Accordingly, we are maintaining our Long-Term Attractive rating on ALTR."
 
     Broadcom Corporation
     (Nasdaq:   BRCM) $34.01
     Market Performer
     F2001E EPS: $0.00, down from $0.50
     F2002E EPS: $0.45, down from $0.97
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Broadcom essentially reported results in-line with its pre-announced
     range," said Veerappan. "We believe that business at Broadcom is going
     through a rather tough period; doubtless exacerbated by a slowing economy,
     but also because of competitive dynamics in the company's 'edge' oriented
     businesses. The combination of the above two factors, we believe, leads to
     a cloudy outlook. In summary, our investment thesis is for caution in the
     near term, followed by a gigabit Ethernet product cycle-led recovery
     potential for Broadcom stock later in the year.  Given this view, we
     maintain our Market Perform rating on the stock at this time."
 
     Credence Systems Corporation
     (Nasdaq:   CMOS) $23.76
     Long-Term Attractive
     F2001E EPS: $0.00, New
 
     Sue Billat, Semiconductor Equipment/Foundries
     "Yesterday after the close, Credence lowered its guidance for FQ2 (Apr)
     due to weak orders as well as push-outs and cancellations from its
     existing backlog," said Billat. "As a result, the company expects FQ2
     revenues to fall about 60% sequentially to below $50 million. We had
     projected revenues to decline 37.5% in FQ2. In light of the near term
     weakness, we are reducing our Q2:01 EPS estimate to a loss of $0.09 (from
     $0.00) on revenues of $48.0 million (from $77.0 million) while maintaining
     our FY01 EPS estimates of $0.00 on lower revenues of $265.2 million
     (previously $332.2 million). As the back-end sector typically responds
     quickly when a recovery occurs, we believe there may be upside to our FQ4
     estimates.  At 1.8x book value, CMOS is trading only slightly above its
     CY98 trough valuation. Unlike the downturn in 1998-99 when the company
     lost $0.48 over four quarters, we expect it to lose no more than $0.27
     over the next three quarters and breakeven for the fiscal year.
     Accordingly we are maintaining our LTA rating."
 
     Dupont Photomasks, Inc.
     (Nasdaq:   DPMI) $50.48
     Buy
     F2001E EPS: $2.29, down from $2.45
     F2002E EPA: $2.13, down from $2.85
 
     Sue Billat, Semiconductor Equipment/Foundries
     "DuPont reported operating FQ3:01 EPS of $0.57, below our $0.60 estimate
     due to weaker than expected gross margin as a result of lower utilization
     of trailing edge products," said Billat. "Revenues were a record at $108.2
     million, up 1% sequentially and in line with our expectation. We are
     lowering our estimate for FQ4:01 to $0.52 (from $0.63) on revenues of
     $108.0 million (formerly $114.0 million) and for F02 to $2.13 (from $2.85)
     on revenues of $451.5 million (formerly $492.0 million). At about 21.9x
     our CY02 numbers, the stock is trading at a premium to competitor
     Photronics. We believe the continued acceleration of the transition to
     finer feature sizes should drive the growth of advanced photomasks as they
     enable the extension of current generation lithography tools to the next
     technology node. We are concerned, however, that DPI may be losing share
     at the trailing edge. We reiterate our Buy rating on DPMI."
 
     Extreme Networks, Inc.
     (Nasdaq:   EXTR) $21.75
     Buy
     F2001E EPS: $0.10, up from $0.05
 
     Paul Johnson, Communications/Networking
     "Extreme reported slight upside to pre announced expectations, albeit
     significantly below our estimates prior to the April 5, 2001 pre
     announcement," said Johnson. "Extreme attributed the majority of the
     revenue shortfall this quarter to a large number of delayed orders and
     requests for delayed shipments very late in the quarter.  Extreme won
     three new international customers (Telia, TelestraSaturn and Wind) in the
     quarter -- yielding a more positive outlook on the company's international
     business. We are raising our estimates for 2001 and 2002 as a result of
     modest upside in the quarter and slightly better demand visibility.  We
     are raising our gross margin expectations due to the new products that are
     expected to begin shipping in the next several quarters.  Additionally,
     the company plans to receive a tax benefit for the next quarter as it
     returns to profitability. Although gigabit Ethernet's graduation to the
     world of large carriers has begun to yield larger contracts for Extreme to
     bid upon, sell cycles have also grown longer.  Since the majority of real
     competition in carrier class gigabit Ethernet is still in developmental
     stage, we believe Extreme is well positioned to weather the economic
     downturn that we have entered into -- reaping the benefits that may
     follow.  As a result, we are reiterating our Buy recommendation on Extreme
     Networks."
 
     Hi/fn, Inc.
     (Nasdaq:   HIFN) $15.27
     Long-Term Attractive
     F2001E EPS: $0.29, down from $1.01
     F2002E EPS: ($0.07), down from $1.27
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Hi/fn reported Q2:F01 (March) results with revenue of $13.8 million,
     gross margin of 76.3%, operating margin of 16.8%, and EPS from continuing
     operations of $0.18," said Veerappan. "Q2:F01 revenue of $13.8 million was
     down 14% quarter-over-quarter due to a decline in sales in the company's
     networking (down 5% Q-Q) and storage (down 33% Q-Q) businesses.
     Compression and classification software sales were up 39% Q-Q, helping to
     offset the weakness in the company's networking business. It is important
     to note that Q2's total revenue of $13.8 million was in-line with the
     company's Q1:F01 (December) guidance. Given the continued difficult
     business environment, we are reducing our Q3:F01, F01, and F02, revenue
     and EPS estimates. While the current downturn in the communications
     markets has impacted Hi/fn's near-term outlook (down 40% Q-Q in June), we
     believe that the company has made progress with regard to its transition
     to higher data rate security processors capable of performing compression,
     encryption, and authentication on a single chip. Reportedly, the company
     has garnered design wins at OC-3 data rates. We believe that converting
     recent design wins into production revenue and delivering on products such
     as the 8154 OC-48 security processor will be important milestones for
     investors to track."
 
     Immunex Corporation
     (Nasdaq:   IMNX) $16.80
     Buy
     2001E EPS: $0.28, up from $0.26
 
     Michael King, Biopharmaceuticals
     "IMNX reported 1Q:01 EPS of $0.07, beating our estimate and Street
     consensus of $0.06," said King. "Enbrel sales were $164.9 million, quite a
     bit below our estimate of $192 million. Total revenue was $218 million,
     below our $245 million estimate. Gross margins of 72% beat our 71%
     estimate. We are lowering our Enbrel sales estimate for 2001 from $760
     million to $746 million. However, our estimate for the remaining three
     quarters have actually increased based on our estimate that the company
     will make up the first quarter miss. Our 2001E EPS increases from $0.26 to
     $0.28 due to increased Enbrel estimates in addition to decreased R&D and a
     slightly decreased share count. While the Enbrel number was a little low
     this quarter, we do not believe this reflects underlying demand. We
     believe patient interest remains high. Catalysts for the stock include an
     SBLA filing for psoriatic arthritis, manufacturing milestones, and Phase
     II psoriasis data. We would be buyers of the stock on any weakness in
     trading and reiterate our Buy rating."
 
     Internet Security Systems, Inc.
     (Nasdaq:   ISSX) $39.53
     Long-Term Attractive
     2002E EPS: $0.94, New
 
     Dane Lewis, Infrastructure: Systems & Software
     "Internet Security Systems' Q1:01 revenues and EPS were slightly below our
     expectations," said Lewis. "ISS' managed services business showed growth
     in Q1:01; however, license and product sales declined sequentially driven
     by order delays and reductions as a result of the weak economic
     environment. We are fine-tuning our 2001 revenue estimate from $286
     million to $285 million and maintaining our EPS estimate at $0.67. We
     expect 2002 revenues of $409 million and EPS of $0.88. ISS is trading at
     6.2x our estimated 2001 revenues and 4.3x estimated 2002 revenues. In
     addition, ISS is trading at a 59x PE for 2001 and a 42x PE for 2002. We
     believe that the company faces a solid opportunity in its core markets of
     intrusion detection and scanning, and a strong emerging opportunity in
     managed security services market. However, in this weak economic
     environment, we believe that customers could continue to delay and reduce
     orders. We maintain our Long-Term Attractive rating."
 
     i2 Technologies, Inc.
     (Nasdaq:   ITWO) $19.97
     Buy
     F2001E EPS: ($0.08), down from $0.20
     F2002E EPS: $0.23, down from $0.37
 
     Eric Upin, Business-to-Business eCommerce
     "As expected in the wake of the company's pre-release earlier this month,
     i2a delivered mixed Q1 results on Wednesday, April 18," said Upin. "In
     essence, the company met our Q1:01 revenue forecast, coming within 2% of
     our original estimate - testament to i2's very competitive position in one
     of the higher priority application areas in this difficult economic
     environment. Total revenue was $357 million, of which $211 million was
     license revenue. With i2 continuing to hire aggressively throughout the
     quarter, the company missed our original cash EPS estimate by $0.04 --
     reporting $0.02 in cash EPS. Even more significant than i2's modest Q1
     shortfall was its very cautious outlook for the remainder of the year --
     where the company's pipeline, visibility, and growth prospects are much
     more limited than just a quarter ago. We are lowering estimates for a
     third time in a little over a month. While we believe our estimates are
     reasonable given the current environment for enterprise software sales and
     i2's current cost structure, if the current downturn in the economy
     worsens or is more protracted than expected, additional downward revisions
     may be in order. For those investors with a long-term horizon (1-2 years),
     we believe i2 represents one of the select few business software companies
     with a realistic opportunity to become a $3-4 billion top-line company
     with 20% plus operating margins over the next several years."
 
     Linear Technology Corporation
     (Nasdaq:   LLTC) $44.50
     Long-Term Attractive
     F2001E EPS: $1.28, down from $1.32
     F2002E EPS: $1.05, down from $1.34
 
     Tore Svanberg, Analog & Mixed-Signal Semiconductor Devices
     "Linear reported March quarter results on Tuesday, April 17," said
     Svanberg. "Revenue grew 9.1% sequentially to $282.0 million, $8.0 million
     better than our estimate. Gross margin expanded 54bps sequentially to
     76.9%.  Expenses were $54.0 million, $1.2 million below our expectations.
     As a result, EPS came in it at $0.38, three pennies better than our
     estimate and two pennies above Street consensus estimate. In terms of the
     outlook, Linear indicated that it has seen a dramatic decline in bookings
     and an increase in cancellations across all business segments.  In
     particular, the company observed a pronounced slowdown geographically in
     North America and specifically in the networking space.  We believe that
     Linear's customers face high inventory levels and weak end market demand.
     As such, Linear has guided for a 20% to 30% sequential decline in revenue
     and earnings for Q4:F01 noting that visibility is at an all time low for
     the company."
 
     Newport Corporation
     (Nasdaq:   NEWP) $38.17
     Buy
     F2001E EPS: $1.36, down from $1.45
     F2002E EPS: $1.48, down from $2.00
 
     Sue Billat, Semiconductor Equipment/Foundries
     "Newport's operating EPS of $0.40, exceeded our and consensus estimates of
     $0.36 due to higher revenues from the fiberoptic segment and expense
     control," said Billat. "Given the recently lowered outlook from leading
     component suppliers, and the weakness in the semiconductor capital
     equipment sector, we are not surprised by the steep 43% decline in
     Newport's fiberoptic segment bookings, which fell to $89.7 million from
     $128.9 million in Q4. To reflect the weakness in the fiberoptic and
     semiconductor equipment businesses, we are reducing our EPS estimates for
     2001 to $1.36 (from $1.45) on revenues of $370.7 million (formerly $400.0
     million) and for 2002 to $1.48 (from $2.00) on revenues of $390.0 (from
     $580.0 million). We believe that the company's move to a new manufacturing
     facility is likely to improve operational efficiency and help gross
     margins stay in the mid-40s despite the steep drop in Q2 and Q3 revenues.
     At 25.8x our CY02 estimates, NEWP is trading at a discount to companies
     not only the optical equipment sector but in the semiconductor equipment
     category as well. Given the company's growth opportunities in the emerging
     optical component equipment sector, we find the stock a compelling buy."
 
     Pinnacle Entertainment, Inc.
     (NYSE:   PNK) $9.34
     Market Performer
     2001E EPS: $0.45, down from $0.58
     2002E EPS: $0.60, down from $0.68
 
     Harry Curtis, Gaming & Lodging
     "On April 10, we raised our 2001 EPS estimates for Pinnacle Entertainment
     to $0.58 from $0.50 based primarily on improving trends at the Belterra
     casino (Indiana) and positive legislative events in Louisiana," said
     Curtis. "While we believe these trends remain in tact, the company's
     Bossier, Biloxi and Reno casinos appear to be under greater pressure than
     we had anticipated. We are reducing our 1Q:01 EPS estimate to $(0.08) from
     $0.01, which is in line with the company's second round of EPS guidance.
     For the year, our EPS estimate declines to $0.45. Our 2001 EBITDA estimate
     declines to $108 million from $113 million. For 2002, our EPS estimate
     declines to $0.60 from $0.68. We maintain our Market Performer rating on
     shares of Pinnacle."
 
     Sanmina Corporation
     (Nasdaq:   SANM) $27.33
     Buy
     F2001E EPS: $1.10 down from $1.20
     F2002E EPS: $1.20, down from $1.40
 
     J. Keith Dunne, Electronic Manufacturing Products & Services
     "Sanmina reported 2Q01 Cash EPS of $0.32, 79% above $0.20 last year, equal
     to our original estimate, and $0.03 above our recently reduced estimates
     due to higher operating margins," said Dunne. "However, due to a sharper
     falloff in demand, we are further reducing our FY01E cash EPS toward the
     lower end of our $1.10-$1.20 range. Similarly, we are reducing FY02E Cash
     EPS. We are maintaining our Buy rating, though the stock may be a little
     ahead of itself given consensus FY01E Cash EPS was $1.35. Sanmina is
     trading for 21x our Cal-02E Cash EPS, a slight premium to large cap EMS
     peers, despite greater exposure to more cyclical, capital intensive PWB
     markets.  Conversely, our estimates exclude the impact of acquisitions,
     which could be funded from positive cash flow and $1.3 billion of cash."
 
     Siebel Systems, Inc.
     (Nasdaq:   SEBL) $33.98
     Buy
     F2001E EPS: $0.58, down from $0.69
     F2002E EPS: $0.70, down from $1.03
 
     Eric Upin, Business-to-Business eCommerce
     "Siebel reported a solid quarter-beating our estimates and delivering on
     the company's guidance, a substantial accomplishment for a company of this
     size in a tough market," said Upin. "However, Siebel management provided
     downward guidance based on the extremely challenging business climate and
     slowing demand for software. We are lowering June quarter numbers based on
     Siebel's downward guidance, lack of visibility into pipeline conversion
     rates, and risks associated with global economic conditions.  We are also
     lowering our 2001 and 2002 estimates-recognizing that further downward
     revisions are possible if we experience a protracted economic downturn.
     Although we have entered an increasingly challenging environment for
     software, we believe that Siebel will continue to be the dominant
     franchise in the CRM space longer term. However, we would not be
     aggressive buyers of the stock at this time-based on current valuation
     levels, which are not yet compelling, and additional downside risk to the
     numbers."
 
     Tellabs, Inc.
     (Nasdaq:   TLAB) $35.54
     Long-Term Attractive
     2001E EPS: $1.40, down from $1.45
     2002E EPS: $1.77, down from $2.01
 
     Paul Silverstein, Communications/Networking
     "Tellabs reported revenues and EPS in-line with our expectations for the
     March quarter, which were revised after the company's second pre-
     announcement of the quarter on April 6, 2001," said Silverstein.
     "Revenues of $772.0 million and EPS of $0.29 compare to our $772.0 million
     and $0.29 forecasts, but are significantly below the company's first pre-
     announced guidance issued on March 7, 2001 of revenues of $830.0 to $865.0
     million and EPS of $0.35 to $0.38 and Tellabs's original forecast of
     revenues of $865.0 to $890.0 million and EPS of $0.39.  We are further
     lowering our fiscal 2001 and fiscal 2002 revenue and EPS estimates given
     the deterioration in business conditions.  We maintain our LTA
     recommendation regarding the company's shares given our belief that the
     company remains well positioned with its TITAN product line."
 
     Teradyne, Inc.
     (NYSE:   TER) $35.00
     Long-Term Attractive
     F2001E EPS: $0.43, down from $1.16
     F2002E EPS: $0.70, down from $1.88
 
     Sue Billat, Semiconductor Equipment/Foundries
     "Despite reporting revenues in line with our revenue estimates, Teradyne
     reported Q1:01 EPS of $0.33 that exceeded our estimate by a penny due to
     slightly lower operating expenses," said Billat. "Orders fell steeply, as
     expected, by 45% sequentially to $357.1 million from $651.6 million in Q4
     due to weakness in semiconductor test as well as softening outlook of the
     connection systems business. Going forward, we anticipate the steep
     decline in Q2 sales to drive down gross margins by about 750bp, as non-
     semiconductor test, which is labor intensive, becomes a higher portion of
     revenues. Accordingly, we are reducing our EPS estimates for Q2 to $0.00
     from $0.25 on revenues of $435.0 million (formerly $550.0 million) and for
     2001 to $0.43 from $1.16 on revenues of $1.95 billion (formerly $2.32
     billion). We are also publishing 2002 EPS estimate of $0.70 on revenues of
     $2.15 billion. We are maintaining our Long-Term Attractive rating on TER."
 
     Transwitch Corporation
     (Nasdaq:   TXCC) $16.39
     Buy
     2001E EPS: $0.27, up from $0.23
     2002E EPS: $0.34, up from $0.30
 
     Paul Johnson, Communication/Networking
     "Transwitch reported their March quarter in line with pre-announced
     expectations from March 26, 2001, albeit significantly below both the
     company's first pre-announcement (March 8, 2001) and our original
     expectations for the quarter," said Johnson. "TranSwitch attributed the
     majority of the revenue shortfall this quarter to weakness in the
     telecommunications systems market in North America with cancellations and
     push-outs of orders from contract manufacturers and OEM customers --
     especially during the month of March.  Although management commented that
     business in Asia and Europe remains strong, we believe that visibility in
     these areas is also much lower than originally thought.  On a positive
     note, management also commented that the company continues to see strong
     design-win momentum and that the new product releases are on schedule. We
     rate TranSwitch a Buy."
 
     Travelocity.com Inc.
     (Nasdaq:   TVLY) $24.08
     Buy
     2001E EPS: $0.08, up from $0.01
     2002E EPS: $0.31, down from $0.32
 
     Lauren Cooks Levitan, Branded Internet
     "Even against a seemingly tough economic environment, Travelocity reported
     Q1 results which impressively beat management guidance and our estimates
     due to better-than-expected transaction revenues, advertising revenues,
     conversion ratios ("look-to-booker" ratio) and gross margin," said
     Levitan. "Travelocity's Q1 earnings conference call is scheduled for later
     this morning, after which we anticipate revising our earnings estimates.
     We note, in its Q1 earnings press release issued yesterday, the company
     provided guidance to expect 2001 cash EPS of $0.17-$0.21 per share. This
     compares to our previous 2001 cash EPS estimate of $0. We believe
     investors should react positively to Travelocity's announcement of better-
     than-expected Q1 results and cash profitability. We note that despite a
     70% appreciation in TVLY shares in recent weeks, the stock remains 15-20%
     below the high $20s target price implied by our discounted cash flow
     assumptions. As a result, we believe shares of Travelocity remain an
     attractive investment opportunity, particularly for long-term oriented
     investors."
 
     Turnstone Systems, Inc.
     (Nasdaq:   TSTN) $6.13
     Market Performer
     2001E EPS: ($0.55), down from ($0.34)
     2002E EPS: ($0.47), down from ($0.28)
 
     Paul Johnson, Communication/Networking
     "Turnstone's reported results for the March quarter were slightly above
     our and Street expectations," said Johnson. "Revenues of $6.6 million and
     an "adjusted" loss of $0.08 per share came in above our original estimates
     of $5 million and operating loss per share of $0.11.  The company
     announced two new customers in the quarter -- EATEL and Pine Tree
     Networks. Despite the slight upside and customer acquisition, visibility
     for the company continues to be virtually non-existent. We are lowering
     estimates for fiscal 2001 and 2002 to reflect the virtual lack of
     visibility into the future.  We do believe that our new estimates are
     conservative, however. We are maintaining our Market Performer rating on
     the shares of Turnstone Systems."
 
     Comments:
 
     Advanced Micro Devices, Inc.
     (NYSE:   AMD) $27.70
     Buy
 
     Eric Rothdeutsch, Semiconductors/Computer Hardware
     "As one of the few semiconductor companies not to revise its March quarter
     guidance, AMD reported solid 1Q01 revenues of $1.19 billion, up 1.2% QoQ
     and ahead of our $1.07 billion estimate," said Rothdeutsch. "EPS was
     $0.37, beating consensus by $0.04 and our estimate by $0.07.  Our F2001
     and F2002 EPS estimates remain intact at $1.50 and $1.90, respectively. We
     are reiterating our Buy rating and are raising our 12-month price target
     from $31 to $35, or 18.4 times our F01 EPS estimate of $1.90.  We note
     that Intel is trading at 45 times our F01 EPS estimate of $0.70, or at a
     30 multiple premium to AMD, a gap we expect to narrow."
 
     Alza Corporation
     (NYSE:   AZA) $44.04
     Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "With what we regard as exceptional growth prospects for Concerta in the
     near term, and with Alza's strong technology platform over the long term,
     we expect significant and sustainable strong sales and above 20% EPS
     growth for Alza operations alone," said Hazlett. "We continue to rate AZA
     shares Buy."
 
     Celestica Inc.
     (NYSE:   CLS) $43.00
     Buy
 
     J. Keith Dunne, Electronic Manufacturing Products & Services
     "CLS reported adjusted 1Q01 Cash EPS of $0.39, double $0.20 last year, and
     in line with our $0.39 estimate as 4% higher sales offset slightly lower
     interest income," said Dunne. "Equally important, CLS indicated 2Q01E Cash
     EPS may be slightly ahead of our estimates on higher sales and better
     margins. We are maintaining our FY01E Cash EPS but are pulling forward
     $0.02 into 2Q to reflect greater near term sales expectations despite a
     softer economy. Importantly, CLS has $482M in cash that can be used for
     acquisitions, which are not in our forecast. We are maintaining our Buy
     rating."
 
     Charlotte Russe Holding Inc.
     (Nasdaq:   CHIC) $28.10
     Buy
 
     Janet Joseph Kloppenburg, Specialty Retailing/Apparel Manufacturers
     "Charlotte Russe reported that Q2:F01 (March) EPS increased 44.2% to $0.14
     from $0.10 in Q2:F00, nicely exceeding our $0.13 estimate," said
     Kloppenburg. "Importantly, CHIC's Q2:F01 earnings were negatively impacted
     by a calendar shift that moved approximately $3 mm in post-Christmas sales
     to the first fiscal quarter this year vs. the second fiscal quarter last
     year. We believe this calendar shift pulled approximately $0.02 of EPS
     into Q1:F01 from Q2:F01. Given the $0.01 earnings upside in Q2:F01, we are
     raising our F2001 EPS estimate by $0.01 to $1.11, which translates to
     32.7% EPS growth from $0.83 in F2000. Our F2002 EPS estimate remains
     $1.43. Our C2001 EPS estimate increases $0.01 to $1.22 vs. $0.95 in C2000.
     Our C2002 EPS estimate increases to $1.56 from $1.55 prior. We believe
     CHIC shares should be able to maintain their current valuation going
     forward, as we expect the company continues to outperform competitors in a
     difficult environment. Furthermore, given the company's strong track
     record of exceeding current earnings estimates, we believe shares should
     appreciate as we move through 2001 and the company generates upside to
     investors' current earnings outlook. As a result, we maintain our Buy
     rating on CHIC shares."
 
     Citrix Systems, Inc.
     (Nasdaq:   CTXS) $26.55
     Long-Term Attractive
 
     Mark Perutz, eBusiness Infrastructure
     "Yesterday, Citrix reported solid Q1:01 results that effectively met our
     estimates," said Perutz. "Revenues were $132.8 million, slightly ahead of
     our estimate of $130.8 million.  Revenue for the quarter represented an 8%
     sequential increase over the prior quarter, and a 4% year/year increase,
     finally surpassing Citrix's Q1:00 record revenue of $127.5 million.
     Operating EPS was $0.17, meeting our estimate of $0.17.  We are impressed
     with Citrix's ability to post another quarter of solid growth in a
     difficult environment.  While Citrix did meet our estimates, it was not
     immune to the difficult IT spending environment in the US. Based on
     Citrix's solid Q4:00 performance and near-term demand for its products, we
     are maintaining both our revenue and operating EPS estimates for the
     remaining quarters of 2001. Despite the near-term strength in demand for
     Citrix's solutions, we still harbor concerns about its long-term
     prospects. We are reiterating our LTA rating."
 
     Eli Lilly and Company
     (NYSE:   LLY) $79.85
     Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "We believe 2001 has the potential to be an exciting year for Eli Lilly,
     with possible FDA approvals for Zovant for sepsis and Forteo for
     osteoporosis, and regulatory filings for Cialis for erectile dysfunction,
     atomoxetine for attention-deficit/hyperactivity disorder and duloxetine
     for depression/incontinence," said Hazlett. "We continue to rate LLY
     shares Buy."
 
     Equifax Inc.
     (NYSE:   EFX) $31.68
     Market Performer
 
     Andrew Jeffrey, eProcessing/ePayment
     "Equifax reported 1Q01 EPS of $0.35 on revenues of $479.7 million
     yesterday, modestly ahead of our $0.35 and $470.5 estimates," said
     Jeffrey. "We estimate that total revenues were up approximately 6% in the
     quarter, on a pro forma basis, the fastest growth the company has enjoyed
     in about two years.  These improving results were driven by strong
     mortgage refinance volume and the first signs of traction in the company's
     Internet initiatives. Although the company's revenue growth seems to have
     recovered -- albeit against last year's easy comparisons -- we are
     maintaining our Market Performer rating.  This stance results from our
     view that the company's revenue rebound is still tenuous in a slowing
     economy and the shares are roughly fully valued."
 
     Keynote Systems, Inc.
     (Nasdaq:   KEYN) $12.98
     Long-Term Attractive
 
     Richard Juarez, eCommerce Infrastructure Services
     "Keynote Systems reported FY 2Q01 revenues of $12.0 million and EPS of
     $0.07, both in line with the April 3, 2001 pre-announced results," said
     Juarez. "FY 2Q01 revenue from dotcoms and ISPs is estimated at 30% of
     total revenue, down from 35% in FY 1Q01.  We are maintaining our Long-Term
     Attractive rating and future period estimates based upon the company's net
     cash position of an estimated $11.89 per share at March 31st, 2001. As we
     have stated before, we believe that in order to gain back investors'
     attention and support, Keynote must 1) reverse the declines in customers,
     URLs measured, and revenue/URL, 2) pull forward operational profitability
     via more effective expense management, and 3) leverage and deploy its cash
     reserves more effectively."
 
     Merck & Co., Inc.
     (NYSE:   MRK) $79.43
     Market Performer
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "March prescription data for key Merck drugs shows that Fosamax continues
     to show strength due to its new once-weekly dosage," said Hazlett. "Vioxx
     and Singulair have seen share growth gains; growth for both could
     moderate, however.  In part due to additional generics arriving for a
     number of products, including possibly Prilosec, we continue to rate MRK
     shares Market Performer."
 
     Netegrity, Inc.
     (Nasdaq:   NETE) $34.34
     Buy
 
     Dane Lewis, Infrastructure: Systems & Software
     "Netegrity announced yesterday that it has opened a new office in Japan
     and released the Japanese version of its flagship product," said Lewis.
     "We believe there is a large market opportunity for Netegrity
     internationally as the company is still at the beginning of expanding this
     channel. With its dominant market share (approximately 75%), we believe
     that NETE is very well positioned in the centralized Web-access management
     market. Netegrity is trading at 10x our estimated FY2001 revenues and at a
     PE of 70x while growing revenues at 117% and earnings at 513%. We continue
     to recommend purchase of the stock at these levels."
 
     Pfizer, Inc.
     (NYSE:   PFE) $42.40
     Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "March prescription data for key Pfizer drugs shows that Lipitor, the
     cholesterol-lowering class leader, continues to show strength due to
     continued solid sales force focus, though competition is in the wings with
     new competitor Crestor," said Hazlett. "Though market share has declined
     modestly for Celebrex (co-marketed with Pharmacia), script growth
     continues to be robust for the drug.  Due to its potent combination of
     excellent sales force, solid core marketed drugs, and relatively few near-
     term patent expirations, we continue to rate PFE shares Buy."
 
     Sepracor Inc.
     (Nasdaq:   SEPR) $43.50
     Strong Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "The remainder of 2001 should be positive for Sepracor, including filing
     of (s)-zopiclone in 2H01 for sleep disorders and a number of compounds
     moving into phase III," said Hazlett. "In addition to its in-house
     portfolio, Sepracor will be receiving royalties on desloratadine for
     allergy, Allegra for allergy from Aventis and norcisipride for GERD from
     Johnson and Johnson, among others.  We reiterate our Strong Buy rating on
     SEPR shares."
 
     Schering-Plough Corporation
     (NYSE:   SGP) $38.29
     Market Performer
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "March prescription data for key Schering-Plough drugs shows that
     Schering's two key drivers, namely Claritin (allergies) and Rebetron
     (hepatitis C) continue to be pressured," said Hazlett. "Although PEG-
     Intron will likely supplement Schering's hepatitis C franchise, we believe
     competition from Roche's Pegasys will likely be significant.
     Additionally, timing of final desloratadine (allergies) approval remains
     uncertain, potentially hindering a switching campaign from Claritin in
     advance of its patent expiration (possibly year-end 2002).  We continue to
     rate SGP shares Market Performer."
 
     Unless otherwise noted, prices are as of Tuesday, April 17, 2001.
 
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 Credence Systems, Extreme Networks, Hi/fn, Immunex, Internet Security Systems,
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 Travelocity.com, Turnstone Systems, Charlotte Russe Holdings, Citrix Systems,
 Keynote Systems, Netegrity, and Sepracor and has been a managing or comanaging
 underwriter for or has privately placed securities of Extreme Networks, Hi/fn,
 Internet Security Systems, Transwitch, Celestica, Turnstone Systems, Charlotte
 Russe Holdings, Keynote Systems, and Netegrity within the past three years.
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SOURCE Robertson Stephens, Inc.
    SAN FRANCISCO, April 19 /PRNewswire/ -- The following is being issued by
 Robertson Stephens, Inc.:
 
     Rating Changes:
 
     KLA-Tencor Corporation
     (Nasdaq:   KLAC) $47.08
     Buy
     F2001E EPS: $1.86, up from $1.83
     F2002E EPS: $1.26, up from $1.12
 
     Sue Billat, Semiconductor Equipment/Foundries
     "KLA posted Q3:F01 operating EPS of $0.48, beating our $0.45 estimate and
     the Street's expectations of $0.44," said Billat. "We are raising our
     revenue projection for FQ4 to $445 million (from $415 million) but
     maintaining EPS of $0.27 on lower gross margin assumptions. We are also
     raising our F02 EPS estimate to $1.26 (from $1.12) on revenues of $1.865
     billion (from $1.745 billion). We note that KLA will begin reporting under
     SAB 101 guidelines in Q4:F01 and that our estimates are not adjusted for
     this. As a major participant in key technological transitions such as
     linewidth shrinks, copper interconnect and 300 mm, we believe KLA should
     outperform the overall industry in CY02. At 24.5x our CY02 EPS estimate,
     KLAC is trading at a discount to large cap comparables. Accordingly, we
     are upgrading KLAC to a Buy from a LTA rating."
 
     Estimate Changes:
 
     Advanced Fibre Communications, Inc.
     (Nasdaq:   AFCI) $16.59
     Buy
     F2001E EPS: $0.06, down from $0.66
     F2002E EPS: $0.28, down from $0.85
 
     Paul Silverstein, Communications/Networking
     "AFC reported first quarter revenues of $82.2 million and a loss of
     ($0.06) per share, significantly below our $100.0 million and $0.12
     respective estimates," said Silverstein. "The shortfall in the quarter was
     due almost entirely to the collapse in revenues from Winstar
     Communications, which earlier in the week filed for Chapter 11 bankruptcy
     protection, and the significant decline in revenues from each of Tellabs
     and SBC. These three customers accounted for virtually the entire $18
     million shortfall versus our $100 million forecast for the quarter.  We
     are significantly lowering our revenue and EPS estimates for 2001 and 2002
     given the loss in revenues from Winstar and Tellabs and the slower-than-
     forecast roll-out of DSL off of AFC's Dmax plus and eMax plus DLC systems
     by SBC and Verizon.  While there are obviously near-term issues, we view
     AFC's business as fundamentally sound, with the significant prospective
     growth driver of DSL continuing to loom on the horizon.  With $7 - 8
     after-tax of cash on AFC's balance sheet, it would appear as if the market
     is assigning an option value to AFC's core business. While we are
     significantly reducing our EPS forecasts for fiscal 2001 and 2002, we
     believe that there is upside to our estimates and that investors have
     already priced into AFC's shares most of the above-mentioned datapoints,
     thus dampening the downside risk on these shares.  As a result, we are
     maintaining our Buy recommendation on AFC's shares."
 
     Altera Corporation
     (Nasdaq:   ALTR) $28.63
     Long-Term Attractive
     F2001E EPS: $0.45, down from $0.50
 
     Eric Rothdeutsch, Semiconductors/Computer Hardware
     "Altera reported 1Q01 EPS of $0.16, in line with consensus and $0.02 above
     our estimate," said Rothdeutsch. "Revenues of $287.4 million were down 22%
     QoQ, above our $272.3 million estimate. As a result of a continuing
     inventory correction and weakening demand across all end markets and
     geographies, we are cutting our F2001 revenue and EPS estimates from $1.05
     billion and $0.50 to $984 million and $0.45.  We are introducing our F2002
     revenue and EPS estimates of $1.07 billion and $0.45.  We are cautious on
     the company's prospects pending better visibility into the rate at which
     the company burns off its excess inventory and end market demand improves.
     Accordingly, we are maintaining our Long-Term Attractive rating on ALTR."
 
     Broadcom Corporation
     (Nasdaq:   BRCM) $34.01
     Market Performer
     F2001E EPS: $0.00, down from $0.50
     F2002E EPS: $0.45, down from $0.97
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Broadcom essentially reported results in-line with its pre-announced
     range," said Veerappan. "We believe that business at Broadcom is going
     through a rather tough period; doubtless exacerbated by a slowing economy,
     but also because of competitive dynamics in the company's 'edge' oriented
     businesses. The combination of the above two factors, we believe, leads to
     a cloudy outlook. In summary, our investment thesis is for caution in the
     near term, followed by a gigabit Ethernet product cycle-led recovery
     potential for Broadcom stock later in the year.  Given this view, we
     maintain our Market Perform rating on the stock at this time."
 
     Credence Systems Corporation
     (Nasdaq:   CMOS) $23.76
     Long-Term Attractive
     F2001E EPS: $0.00, New
 
     Sue Billat, Semiconductor Equipment/Foundries
     "Yesterday after the close, Credence lowered its guidance for FQ2 (Apr)
     due to weak orders as well as push-outs and cancellations from its
     existing backlog," said Billat. "As a result, the company expects FQ2
     revenues to fall about 60% sequentially to below $50 million. We had
     projected revenues to decline 37.5% in FQ2. In light of the near term
     weakness, we are reducing our Q2:01 EPS estimate to a loss of $0.09 (from
     $0.00) on revenues of $48.0 million (from $77.0 million) while maintaining
     our FY01 EPS estimates of $0.00 on lower revenues of $265.2 million
     (previously $332.2 million). As the back-end sector typically responds
     quickly when a recovery occurs, we believe there may be upside to our FQ4
     estimates.  At 1.8x book value, CMOS is trading only slightly above its
     CY98 trough valuation. Unlike the downturn in 1998-99 when the company
     lost $0.48 over four quarters, we expect it to lose no more than $0.27
     over the next three quarters and breakeven for the fiscal year.
     Accordingly we are maintaining our LTA rating."
 
     Dupont Photomasks, Inc.
     (Nasdaq:   DPMI) $50.48
     Buy
     F2001E EPS: $2.29, down from $2.45
     F2002E EPA: $2.13, down from $2.85
 
     Sue Billat, Semiconductor Equipment/Foundries
     "DuPont reported operating FQ3:01 EPS of $0.57, below our $0.60 estimate
     due to weaker than expected gross margin as a result of lower utilization
     of trailing edge products," said Billat. "Revenues were a record at $108.2
     million, up 1% sequentially and in line with our expectation. We are
     lowering our estimate for FQ4:01 to $0.52 (from $0.63) on revenues of
     $108.0 million (formerly $114.0 million) and for F02 to $2.13 (from $2.85)
     on revenues of $451.5 million (formerly $492.0 million). At about 21.9x
     our CY02 numbers, the stock is trading at a premium to competitor
     Photronics. We believe the continued acceleration of the transition to
     finer feature sizes should drive the growth of advanced photomasks as they
     enable the extension of current generation lithography tools to the next
     technology node. We are concerned, however, that DPI may be losing share
     at the trailing edge. We reiterate our Buy rating on DPMI."
 
     Extreme Networks, Inc.
     (Nasdaq:   EXTR) $21.75
     Buy
     F2001E EPS: $0.10, up from $0.05
 
     Paul Johnson, Communications/Networking
     "Extreme reported slight upside to pre announced expectations, albeit
     significantly below our estimates prior to the April 5, 2001 pre
     announcement," said Johnson. "Extreme attributed the majority of the
     revenue shortfall this quarter to a large number of delayed orders and
     requests for delayed shipments very late in the quarter.  Extreme won
     three new international customers (Telia, TelestraSaturn and Wind) in the
     quarter -- yielding a more positive outlook on the company's international
     business. We are raising our estimates for 2001 and 2002 as a result of
     modest upside in the quarter and slightly better demand visibility.  We
     are raising our gross margin expectations due to the new products that are
     expected to begin shipping in the next several quarters.  Additionally,
     the company plans to receive a tax benefit for the next quarter as it
     returns to profitability. Although gigabit Ethernet's graduation to the
     world of large carriers has begun to yield larger contracts for Extreme to
     bid upon, sell cycles have also grown longer.  Since the majority of real
     competition in carrier class gigabit Ethernet is still in developmental
     stage, we believe Extreme is well positioned to weather the economic
     downturn that we have entered into -- reaping the benefits that may
     follow.  As a result, we are reiterating our Buy recommendation on Extreme
     Networks."
 
     Hi/fn, Inc.
     (Nasdaq:   HIFN) $15.27
     Long-Term Attractive
     F2001E EPS: $0.29, down from $1.01
     F2002E EPS: ($0.07), down from $1.27
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Hi/fn reported Q2:F01 (March) results with revenue of $13.8 million,
     gross margin of 76.3%, operating margin of 16.8%, and EPS from continuing
     operations of $0.18," said Veerappan. "Q2:F01 revenue of $13.8 million was
     down 14% quarter-over-quarter due to a decline in sales in the company's
     networking (down 5% Q-Q) and storage (down 33% Q-Q) businesses.
     Compression and classification software sales were up 39% Q-Q, helping to
     offset the weakness in the company's networking business. It is important
     to note that Q2's total revenue of $13.8 million was in-line with the
     company's Q1:F01 (December) guidance. Given the continued difficult
     business environment, we are reducing our Q3:F01, F01, and F02, revenue
     and EPS estimates. While the current downturn in the communications
     markets has impacted Hi/fn's near-term outlook (down 40% Q-Q in June), we
     believe that the company has made progress with regard to its transition
     to higher data rate security processors capable of performing compression,
     encryption, and authentication on a single chip. Reportedly, the company
     has garnered design wins at OC-3 data rates. We believe that converting
     recent design wins into production revenue and delivering on products such
     as the 8154 OC-48 security processor will be important milestones for
     investors to track."
 
     Immunex Corporation
     (Nasdaq:   IMNX) $16.80
     Buy
     2001E EPS: $0.28, up from $0.26
 
     Michael King, Biopharmaceuticals
     "IMNX reported 1Q:01 EPS of $0.07, beating our estimate and Street
     consensus of $0.06," said King. "Enbrel sales were $164.9 million, quite a
     bit below our estimate of $192 million. Total revenue was $218 million,
     below our $245 million estimate. Gross margins of 72% beat our 71%
     estimate. We are lowering our Enbrel sales estimate for 2001 from $760
     million to $746 million. However, our estimate for the remaining three
     quarters have actually increased based on our estimate that the company
     will make up the first quarter miss. Our 2001E EPS increases from $0.26 to
     $0.28 due to increased Enbrel estimates in addition to decreased R&D and a
     slightly decreased share count. While the Enbrel number was a little low
     this quarter, we do not believe this reflects underlying demand. We
     believe patient interest remains high. Catalysts for the stock include an
     SBLA filing for psoriatic arthritis, manufacturing milestones, and Phase
     II psoriasis data. We would be buyers of the stock on any weakness in
     trading and reiterate our Buy rating."
 
     Internet Security Systems, Inc.
     (Nasdaq:   ISSX) $39.53
     Long-Term Attractive
     2002E EPS: $0.94, New
 
     Dane Lewis, Infrastructure: Systems & Software
     "Internet Security Systems' Q1:01 revenues and EPS were slightly below our
     expectations," said Lewis. "ISS' managed services business showed growth
     in Q1:01; however, license and product sales declined sequentially driven
     by order delays and reductions as a result of the weak economic
     environment. We are fine-tuning our 2001 revenue estimate from $286
     million to $285 million and maintaining our EPS estimate at $0.67. We
     expect 2002 revenues of $409 million and EPS of $0.88. ISS is trading at
     6.2x our estimated 2001 revenues and 4.3x estimated 2002 revenues. In
     addition, ISS is trading at a 59x PE for 2001 and a 42x PE for 2002. We
     believe that the company faces a solid opportunity in its core markets of
     intrusion detection and scanning, and a strong emerging opportunity in
     managed security services market. However, in this weak economic
     environment, we believe that customers could continue to delay and reduce
     orders. We maintain our Long-Term Attractive rating."
 
     i2 Technologies, Inc.
     (Nasdaq:   ITWO) $19.97
     Buy
     F2001E EPS: ($0.08), down from $0.20
     F2002E EPS: $0.23, down from $0.37
 
     Eric Upin, Business-to-Business eCommerce
     "As expected in the wake of the company's pre-release earlier this month,
     i2a delivered mixed Q1 results on Wednesday, April 18," said Upin. "In
     essence, the company met our Q1:01 revenue forecast, coming within 2% of
     our original estimate - testament to i2's very competitive position in one
     of the higher priority application areas in this difficult economic
     environment. Total revenue was $357 million, of which $211 million was
     license revenue. With i2 continuing to hire aggressively throughout the
     quarter, the company missed our original cash EPS estimate by $0.04 --
     reporting $0.02 in cash EPS. Even more significant than i2's modest Q1
     shortfall was its very cautious outlook for the remainder of the year --
     where the company's pipeline, visibility, and growth prospects are much
     more limited than just a quarter ago. We are lowering estimates for a
     third time in a little over a month. While we believe our estimates are
     reasonable given the current environment for enterprise software sales and
     i2's current cost structure, if the current downturn in the economy
     worsens or is more protracted than expected, additional downward revisions
     may be in order. For those investors with a long-term horizon (1-2 years),
     we believe i2 represents one of the select few business software companies
     with a realistic opportunity to become a $3-4 billion top-line company
     with 20% plus operating margins over the next several years."
 
     Linear Technology Corporation
     (Nasdaq:   LLTC) $44.50
     Long-Term Attractive
     F2001E EPS: $1.28, down from $1.32
     F2002E EPS: $1.05, down from $1.34
 
     Tore Svanberg, Analog & Mixed-Signal Semiconductor Devices
     "Linear reported March quarter results on Tuesday, April 17," said
     Svanberg. "Revenue grew 9.1% sequentially to $282.0 million, $8.0 million
     better than our estimate. Gross margin expanded 54bps sequentially to
     76.9%.  Expenses were $54.0 million, $1.2 million below our expectations.
     As a result, EPS came in it at $0.38, three pennies better than our
     estimate and two pennies above Street consensus estimate. In terms of the
     outlook, Linear indicated that it has seen a dramatic decline in bookings
     and an increase in cancellations across all business segments.  In
     particular, the company observed a pronounced slowdown geographically in
     North America and specifically in the networking space.  We believe that
     Linear's customers face high inventory levels and weak end market demand.
     As such, Linear has guided for a 20% to 30% sequential decline in revenue
     and earnings for Q4:F01 noting that visibility is at an all time low for
     the company."
 
     Newport Corporation
     (Nasdaq:   NEWP) $38.17
     Buy
     F2001E EPS: $1.36, down from $1.45
     F2002E EPS: $1.48, down from $2.00
 
     Sue Billat, Semiconductor Equipment/Foundries
     "Newport's operating EPS of $0.40, exceeded our and consensus estimates of
     $0.36 due to higher revenues from the fiberoptic segment and expense
     control," said Billat. "Given the recently lowered outlook from leading
     component suppliers, and the weakness in the semiconductor capital
     equipment sector, we are not surprised by the steep 43% decline in
     Newport's fiberoptic segment bookings, which fell to $89.7 million from
     $128.9 million in Q4. To reflect the weakness in the fiberoptic and
     semiconductor equipment businesses, we are reducing our EPS estimates for
     2001 to $1.36 (from $1.45) on revenues of $370.7 million (formerly $400.0
     million) and for 2002 to $1.48 (from $2.00) on revenues of $390.0 (from
     $580.0 million). We believe that the company's move to a new manufacturing
     facility is likely to improve operational efficiency and help gross
     margins stay in the mid-40s despite the steep drop in Q2 and Q3 revenues.
     At 25.8x our CY02 estimates, NEWP is trading at a discount to companies
     not only the optical equipment sector but in the semiconductor equipment
     category as well. Given the company's growth opportunities in the emerging
     optical component equipment sector, we find the stock a compelling buy."
 
     Pinnacle Entertainment, Inc.
     (NYSE:   PNK) $9.34
     Market Performer
     2001E EPS: $0.45, down from $0.58
     2002E EPS: $0.60, down from $0.68
 
     Harry Curtis, Gaming & Lodging
     "On April 10, we raised our 2001 EPS estimates for Pinnacle Entertainment
     to $0.58 from $0.50 based primarily on improving trends at the Belterra
     casino (Indiana) and positive legislative events in Louisiana," said
     Curtis. "While we believe these trends remain in tact, the company's
     Bossier, Biloxi and Reno casinos appear to be under greater pressure than
     we had anticipated. We are reducing our 1Q:01 EPS estimate to $(0.08) from
     $0.01, which is in line with the company's second round of EPS guidance.
     For the year, our EPS estimate declines to $0.45. Our 2001 EBITDA estimate
     declines to $108 million from $113 million. For 2002, our EPS estimate
     declines to $0.60 from $0.68. We maintain our Market Performer rating on
     shares of Pinnacle."
 
     Sanmina Corporation
     (Nasdaq:   SANM) $27.33
     Buy
     F2001E EPS: $1.10 down from $1.20
     F2002E EPS: $1.20, down from $1.40
 
     J. Keith Dunne, Electronic Manufacturing Products & Services
     "Sanmina reported 2Q01 Cash EPS of $0.32, 79% above $0.20 last year, equal
     to our original estimate, and $0.03 above our recently reduced estimates
     due to higher operating margins," said Dunne. "However, due to a sharper
     falloff in demand, we are further reducing our FY01E cash EPS toward the
     lower end of our $1.10-$1.20 range. Similarly, we are reducing FY02E Cash
     EPS. We are maintaining our Buy rating, though the stock may be a little
     ahead of itself given consensus FY01E Cash EPS was $1.35. Sanmina is
     trading for 21x our Cal-02E Cash EPS, a slight premium to large cap EMS
     peers, despite greater exposure to more cyclical, capital intensive PWB
     markets.  Conversely, our estimates exclude the impact of acquisitions,
     which could be funded from positive cash flow and $1.3 billion of cash."
 
     Siebel Systems, Inc.
     (Nasdaq:   SEBL) $33.98
     Buy
     F2001E EPS: $0.58, down from $0.69
     F2002E EPS: $0.70, down from $1.03
 
     Eric Upin, Business-to-Business eCommerce
     "Siebel reported a solid quarter-beating our estimates and delivering on
     the company's guidance, a substantial accomplishment for a company of this
     size in a tough market," said Upin. "However, Siebel management provided
     downward guidance based on the extremely challenging business climate and
     slowing demand for software. We are lowering June quarter numbers based on
     Siebel's downward guidance, lack of visibility into pipeline conversion
     rates, and risks associated with global economic conditions.  We are also
     lowering our 2001 and 2002 estimates-recognizing that further downward
     revisions are possible if we experience a protracted economic downturn.
     Although we have entered an increasingly challenging environment for
     software, we believe that Siebel will continue to be the dominant
     franchise in the CRM space longer term. However, we would not be
     aggressive buyers of the stock at this time-based on current valuation
     levels, which are not yet compelling, and additional downside risk to the
     numbers."
 
     Tellabs, Inc.
     (Nasdaq:   TLAB) $35.54
     Long-Term Attractive
     2001E EPS: $1.40, down from $1.45
     2002E EPS: $1.77, down from $2.01
 
     Paul Silverstein, Communications/Networking
     "Tellabs reported revenues and EPS in-line with our expectations for the
     March quarter, which were revised after the company's second pre-
     announcement of the quarter on April 6, 2001," said Silverstein.
     "Revenues of $772.0 million and EPS of $0.29 compare to our $772.0 million
     and $0.29 forecasts, but are significantly below the company's first pre-
     announced guidance issued on March 7, 2001 of revenues of $830.0 to $865.0
     million and EPS of $0.35 to $0.38 and Tellabs's original forecast of
     revenues of $865.0 to $890.0 million and EPS of $0.39.  We are further
     lowering our fiscal 2001 and fiscal 2002 revenue and EPS estimates given
     the deterioration in business conditions.  We maintain our LTA
     recommendation regarding the company's shares given our belief that the
     company remains well positioned with its TITAN product line."
 
     Teradyne, Inc.
     (NYSE:   TER) $35.00
     Long-Term Attractive
     F2001E EPS: $0.43, down from $1.16
     F2002E EPS: $0.70, down from $1.88
 
     Sue Billat, Semiconductor Equipment/Foundries
     "Despite reporting revenues in line with our revenue estimates, Teradyne
     reported Q1:01 EPS of $0.33 that exceeded our estimate by a penny due to
     slightly lower operating expenses," said Billat. "Orders fell steeply, as
     expected, by 45% sequentially to $357.1 million from $651.6 million in Q4
     due to weakness in semiconductor test as well as softening outlook of the
     connection systems business. Going forward, we anticipate the steep
     decline in Q2 sales to drive down gross margins by about 750bp, as non-
     semiconductor test, which is labor intensive, becomes a higher portion of
     revenues. Accordingly, we are reducing our EPS estimates for Q2 to $0.00
     from $0.25 on revenues of $435.0 million (formerly $550.0 million) and for
     2001 to $0.43 from $1.16 on revenues of $1.95 billion (formerly $2.32
     billion). We are also publishing 2002 EPS estimate of $0.70 on revenues of
     $2.15 billion. We are maintaining our Long-Term Attractive rating on TER."
 
     Transwitch Corporation
     (Nasdaq:   TXCC) $16.39
     Buy
     2001E EPS: $0.27, up from $0.23
     2002E EPS: $0.34, up from $0.30
 
     Paul Johnson, Communication/Networking
     "Transwitch reported their March quarter in line with pre-announced
     expectations from March 26, 2001, albeit significantly below both the
     company's first pre-announcement (March 8, 2001) and our original
     expectations for the quarter," said Johnson. "TranSwitch attributed the
     majority of the revenue shortfall this quarter to weakness in the
     telecommunications systems market in North America with cancellations and
     push-outs of orders from contract manufacturers and OEM customers --
     especially during the month of March.  Although management commented that
     business in Asia and Europe remains strong, we believe that visibility in
     these areas is also much lower than originally thought.  On a positive
     note, management also commented that the company continues to see strong
     design-win momentum and that the new product releases are on schedule. We
     rate TranSwitch a Buy."
 
     Travelocity.com Inc.
     (Nasdaq:   TVLY) $24.08
     Buy
     2001E EPS: $0.08, up from $0.01
     2002E EPS: $0.31, down from $0.32
 
     Lauren Cooks Levitan, Branded Internet
     "Even against a seemingly tough economic environment, Travelocity reported
     Q1 results which impressively beat management guidance and our estimates
     due to better-than-expected transaction revenues, advertising revenues,
     conversion ratios ("look-to-booker" ratio) and gross margin," said
     Levitan. "Travelocity's Q1 earnings conference call is scheduled for later
     this morning, after which we anticipate revising our earnings estimates.
     We note, in its Q1 earnings press release issued yesterday, the company
     provided guidance to expect 2001 cash EPS of $0.17-$0.21 per share. This
     compares to our previous 2001 cash EPS estimate of $0. We believe
     investors should react positively to Travelocity's announcement of better-
     than-expected Q1 results and cash profitability. We note that despite a
     70% appreciation in TVLY shares in recent weeks, the stock remains 15-20%
     below the high $20s target price implied by our discounted cash flow
     assumptions. As a result, we believe shares of Travelocity remain an
     attractive investment opportunity, particularly for long-term oriented
     investors."
 
     Turnstone Systems, Inc.
     (Nasdaq:   TSTN) $6.13
     Market Performer
     2001E EPS: ($0.55), down from ($0.34)
     2002E EPS: ($0.47), down from ($0.28)
 
     Paul Johnson, Communication/Networking
     "Turnstone's reported results for the March quarter were slightly above
     our and Street expectations," said Johnson. "Revenues of $6.6 million and
     an "adjusted" loss of $0.08 per share came in above our original estimates
     of $5 million and operating loss per share of $0.11.  The company
     announced two new customers in the quarter -- EATEL and Pine Tree
     Networks. Despite the slight upside and customer acquisition, visibility
     for the company continues to be virtually non-existent. We are lowering
     estimates for fiscal 2001 and 2002 to reflect the virtual lack of
     visibility into the future.  We do believe that our new estimates are
     conservative, however. We are maintaining our Market Performer rating on
     the shares of Turnstone Systems."
 
     Comments:
 
     Advanced Micro Devices, Inc.
     (NYSE:   AMD) $27.70
     Buy
 
     Eric Rothdeutsch, Semiconductors/Computer Hardware
     "As one of the few semiconductor companies not to revise its March quarter
     guidance, AMD reported solid 1Q01 revenues of $1.19 billion, up 1.2% QoQ
     and ahead of our $1.07 billion estimate," said Rothdeutsch. "EPS was
     $0.37, beating consensus by $0.04 and our estimate by $0.07.  Our F2001
     and F2002 EPS estimates remain intact at $1.50 and $1.90, respectively. We
     are reiterating our Buy rating and are raising our 12-month price target
     from $31 to $35, or 18.4 times our F01 EPS estimate of $1.90.  We note
     that Intel is trading at 45 times our F01 EPS estimate of $0.70, or at a
     30 multiple premium to AMD, a gap we expect to narrow."
 
     Alza Corporation
     (NYSE:   AZA) $44.04
     Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "With what we regard as exceptional growth prospects for Concerta in the
     near term, and with Alza's strong technology platform over the long term,
     we expect significant and sustainable strong sales and above 20% EPS
     growth for Alza operations alone," said Hazlett. "We continue to rate AZA
     shares Buy."
 
     Celestica Inc.
     (NYSE:   CLS) $43.00
     Buy
 
     J. Keith Dunne, Electronic Manufacturing Products & Services
     "CLS reported adjusted 1Q01 Cash EPS of $0.39, double $0.20 last year, and
     in line with our $0.39 estimate as 4% higher sales offset slightly lower
     interest income," said Dunne. "Equally important, CLS indicated 2Q01E Cash
     EPS may be slightly ahead of our estimates on higher sales and better
     margins. We are maintaining our FY01E Cash EPS but are pulling forward
     $0.02 into 2Q to reflect greater near term sales expectations despite a
     softer economy. Importantly, CLS has $482M in cash that can be used for
     acquisitions, which are not in our forecast. We are maintaining our Buy
     rating."
 
     Charlotte Russe Holding Inc.
     (Nasdaq:   CHIC) $28.10
     Buy
 
     Janet Joseph Kloppenburg, Specialty Retailing/Apparel Manufacturers
     "Charlotte Russe reported that Q2:F01 (March) EPS increased 44.2% to $0.14
     from $0.10 in Q2:F00, nicely exceeding our $0.13 estimate," said
     Kloppenburg. "Importantly, CHIC's Q2:F01 earnings were negatively impacted
     by a calendar shift that moved approximately $3 mm in post-Christmas sales
     to the first fiscal quarter this year vs. the second fiscal quarter last
     year. We believe this calendar shift pulled approximately $0.02 of EPS
     into Q1:F01 from Q2:F01. Given the $0.01 earnings upside in Q2:F01, we are
     raising our F2001 EPS estimate by $0.01 to $1.11, which translates to
     32.7% EPS growth from $0.83 in F2000. Our F2002 EPS estimate remains
     $1.43. Our C2001 EPS estimate increases $0.01 to $1.22 vs. $0.95 in C2000.
     Our C2002 EPS estimate increases to $1.56 from $1.55 prior. We believe
     CHIC shares should be able to maintain their current valuation going
     forward, as we expect the company continues to outperform competitors in a
     difficult environment. Furthermore, given the company's strong track
     record of exceeding current earnings estimates, we believe shares should
     appreciate as we move through 2001 and the company generates upside to
     investors' current earnings outlook. As a result, we maintain our Buy
     rating on CHIC shares."
 
     Citrix Systems, Inc.
     (Nasdaq:   CTXS) $26.55
     Long-Term Attractive
 
     Mark Perutz, eBusiness Infrastructure
     "Yesterday, Citrix reported solid Q1:01 results that effectively met our
     estimates," said Perutz. "Revenues were $132.8 million, slightly ahead of
     our estimate of $130.8 million.  Revenue for the quarter represented an 8%
     sequential increase over the prior quarter, and a 4% year/year increase,
     finally surpassing Citrix's Q1:00 record revenue of $127.5 million.
     Operating EPS was $0.17, meeting our estimate of $0.17.  We are impressed
     with Citrix's ability to post another quarter of solid growth in a
     difficult environment.  While Citrix did meet our estimates, it was not
     immune to the difficult IT spending environment in the US. Based on
     Citrix's solid Q4:00 performance and near-term demand for its products, we
     are maintaining both our revenue and operating EPS estimates for the
     remaining quarters of 2001. Despite the near-term strength in demand for
     Citrix's solutions, we still harbor concerns about its long-term
     prospects. We are reiterating our LTA rating."
 
     Eli Lilly and Company
     (NYSE:   LLY) $79.85
     Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "We believe 2001 has the potential to be an exciting year for Eli Lilly,
     with possible FDA approvals for Zovant for sepsis and Forteo for
     osteoporosis, and regulatory filings for Cialis for erectile dysfunction,
     atomoxetine for attention-deficit/hyperactivity disorder and duloxetine
     for depression/incontinence," said Hazlett. "We continue to rate LLY
     shares Buy."
 
     Equifax Inc.
     (NYSE:   EFX) $31.68
     Market Performer
 
     Andrew Jeffrey, eProcessing/ePayment
     "Equifax reported 1Q01 EPS of $0.35 on revenues of $479.7 million
     yesterday, modestly ahead of our $0.35 and $470.5 estimates," said
     Jeffrey. "We estimate that total revenues were up approximately 6% in the
     quarter, on a pro forma basis, the fastest growth the company has enjoyed
     in about two years.  These improving results were driven by strong
     mortgage refinance volume and the first signs of traction in the company's
     Internet initiatives. Although the company's revenue growth seems to have
     recovered -- albeit against last year's easy comparisons -- we are
     maintaining our Market Performer rating.  This stance results from our
     view that the company's revenue rebound is still tenuous in a slowing
     economy and the shares are roughly fully valued."
 
     Keynote Systems, Inc.
     (Nasdaq:   KEYN) $12.98
     Long-Term Attractive
 
     Richard Juarez, eCommerce Infrastructure Services
     "Keynote Systems reported FY 2Q01 revenues of $12.0 million and EPS of
     $0.07, both in line with the April 3, 2001 pre-announced results," said
     Juarez. "FY 2Q01 revenue from dotcoms and ISPs is estimated at 30% of
     total revenue, down from 35% in FY 1Q01.  We are maintaining our Long-Term
     Attractive rating and future period estimates based upon the company's net
     cash position of an estimated $11.89 per share at March 31st, 2001. As we
     have stated before, we believe that in order to gain back investors'
     attention and support, Keynote must 1) reverse the declines in customers,
     URLs measured, and revenue/URL, 2) pull forward operational profitability
     via more effective expense management, and 3) leverage and deploy its cash
     reserves more effectively."
 
     Merck & Co., Inc.
     (NYSE:   MRK) $79.43
     Market Performer
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "March prescription data for key Merck drugs shows that Fosamax continues
     to show strength due to its new once-weekly dosage," said Hazlett. "Vioxx
     and Singulair have seen share growth gains; growth for both could
     moderate, however.  In part due to additional generics arriving for a
     number of products, including possibly Prilosec, we continue to rate MRK
     shares Market Performer."
 
     Netegrity, Inc.
     (Nasdaq:   NETE) $34.34
     Buy
 
     Dane Lewis, Infrastructure: Systems & Software
     "Netegrity announced yesterday that it has opened a new office in Japan
     and released the Japanese version of its flagship product," said Lewis.
     "We believe there is a large market opportunity for Netegrity
     internationally as the company is still at the beginning of expanding this
     channel. With its dominant market share (approximately 75%), we believe
     that NETE is very well positioned in the centralized Web-access management
     market. Netegrity is trading at 10x our estimated FY2001 revenues and at a
     PE of 70x while growing revenues at 117% and earnings at 513%. We continue
     to recommend purchase of the stock at these levels."
 
     Pfizer, Inc.
     (NYSE:   PFE) $42.40
     Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "March prescription data for key Pfizer drugs shows that Lipitor, the
     cholesterol-lowering class leader, continues to show strength due to
     continued solid sales force focus, though competition is in the wings with
     new competitor Crestor," said Hazlett. "Though market share has declined
     modestly for Celebrex (co-marketed with Pharmacia), script growth
     continues to be robust for the drug.  Due to its potent combination of
     excellent sales force, solid core marketed drugs, and relatively few near-
     term patent expirations, we continue to rate PFE shares Buy."
 
     Sepracor Inc.
     (Nasdaq:   SEPR) $43.50
     Strong Buy
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "The remainder of 2001 should be positive for Sepracor, including filing
     of (s)-zopiclone in 2H01 for sleep disorders and a number of compounds
     moving into phase III," said Hazlett. "In addition to its in-house
     portfolio, Sepracor will be receiving royalties on desloratadine for
     allergy, Allegra for allergy from Aventis and norcisipride for GERD from
     Johnson and Johnson, among others.  We reiterate our Strong Buy rating on
     SEPR shares."
 
     Schering-Plough Corporation
     (NYSE:   SGP) $38.29
     Market Performer
 
     Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals
     "March prescription data for key Schering-Plough drugs shows that
     Schering's two key drivers, namely Claritin (allergies) and Rebetron
     (hepatitis C) continue to be pressured," said Hazlett. "Although PEG-
     Intron will likely supplement Schering's hepatitis C franchise, we believe
     competition from Roche's Pegasys will likely be significant.
     Additionally, timing of final desloratadine (allergies) approval remains
     uncertain, potentially hindering a switching campaign from Claritin in
     advance of its patent expiration (possibly year-end 2002).  We continue to
     rate SGP shares Market Performer."
 
     Unless otherwise noted, prices are as of Tuesday, April 17, 2001.
 
     Robertson Stephens maintains a market in the shares of Winstar, Tellabs,
 Advanced Fibre, Altera, Broadcom, Dupont Photomasks, Siebel, KLA-Tencor,
 Credence Systems, Extreme Networks, Hi/fn, Immunex, Internet Security Systems,
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 Travelocity.com, Turnstone Systems, Charlotte Russe Holdings, Citrix Systems,
 Keynote Systems, Netegrity, and Sepracor and has been a managing or comanaging
 underwriter for or has privately placed securities of Extreme Networks, Hi/fn,
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