It's nice to have industry indexes and sector benchmarks. Digesting a single number is so much easier than trying to make sense out of a jumble of companies, stocks, and diverse products.
What's even better is having one company that can act as a proxy for that big market. That's what we have in semiconductor packaging and testing specialist Siliconware Precision Industries
Though about 75% of Siliconware's revenue comes from fabless customers like Broadcom
And of course, that's exactly what happened in the fourth quarter of fiscal 2008. Siliconware reported a net loss of $0.05 per depositary share on sales of $366 million. That's down from profits of $0.19 per ADS in the year-ago quarter and $0.16 per ADS in the third quarter. Sales fell by 28% sequentially and 30% year over year.
Those results include about $0.10 per ADS of non-cash impairment charges, as announced in mid-January. So Siliconware sort of made money after all, and even generated about $171 million of operating cash flow. As bad as the quarter was, demand is still healthy enough to keep Siliconware on life support -- and by extension, keep the chip sector running a while longer.
Keep an eye on this stock, dear Fool. Since Intel and the other big boys have to package and test their chips before sending them out to retail stores like Best Buy
What Siliconware is saying at the moment jibes pretty well with reports from its major customers. But if the next quarter takes a drastic turn for the better or worse, you could steal a march on Mr. Market. It's not quite a crystal ball, but any information advantage is better than nothing.
Intel, Dell, and Best Buy are Motley Fool Inside Value selections. NVIDIA and Best Buy are Motley Fool Stock Advisor recommendations. The Fool owns shares of Best Buy and Intel. It also owns covered calls of Intel. Try any of our Foolish newsletters today, free for 30 days.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.