Verigy Limited (Verigy) reiterated its 3Q 09 revenue and gross margin guidance on 08 July 2009. The company does not expect revenues from recently acquired Touchdown Technologies during 3Q 09 and has not yet factored the overall impact into its company target model. The company also announced a proposed offering of US$110 mn convertible notes maturing in 2014 along with an additional US$16.5 mn to cover over-allotment....

Verigy derives a significant portion of its revenues from Outsourced Semiconductor Assembly and Test (OSAT) manufacturers and sub-contractors (41% of total net revenue in 1Q 09). Demand for consumer electronics products has improved in Mainland China due to the stimulus package implemented by the Chinese government; consequently back-end companies have reported improving utilizations…

Verigy Limited’s (Verigy) 1Q 09 results were below our previous expectations, but reflected revised Management guidance. With the impact of the seasonally slow quarter of the year compounded by severe deterioration in end-market demand, we anticipate semiconductor companies to curb capital spending even further. As a result, we continue to hold a weak outlook for the company in the near term and maintain our HOLD rating…