S&P Upgrades P&G to Accumulate

Also: analysts' opinions on Ultratech Stepper and CIBER

Procter & Gamble (PG ) to 4 STARS (accumulate) from 3 STARS (hold)

\ Analyst: Howard Choe

The company sees mid-single digit growth for the March quarter, higher than S&P's low single-digit estimate. This reflects stronger healthcare and beauty care sales. Before charges, P&G posted December-quarter EPS of $1.03 vs. $0.97, in line with estimates. Sales rose 2%, with healthcare and beauty care up 17% and 11%, respectively. Operating margins rose 90 basis points. The stronger sales outlook adds credibility to P&G's comeback story. S&P thinks the stock should gravitate toward a historic premium to the market, and is raising the fiscal 2002 (June) EPS estimate to $3.49 from $3.46 (excluding goodwill).

Ultratech Stepper (UTEK ): Upgrades to 4 STARS (accumulate) from 3 STARS (hold)

Analyst: Robert Tortoriello

The photolithography equipment maker posted a fourth-quarter loss per share, before special charges, of $0.09, vs. EPS of $0.25, $0.02 ahead of Street. Revenues fell 48% and 11% from the third quarter. However, S&P sees end-market improvement needed to boost earnings. Niche markets of bump processing in semiconductors and microsystems (MEMs) hold growth potential for the company. S&P is raising the 2002 EPS estimate to $0.10 from a loss of $0.06, and says shares are undervalued at 2.1 times sales, slightly above the historical troughs of 1.6.

CIBER (CBR ): Downgrades to 3 STARS (hold) from 2 STARS (avoid)

Analyst: Mark Basham

CIBER is up 126% since its Sept. 21, 2001 low, and will report 2001 results next Thursday. While the compnay has cut costs to stay marginally profitable during a period of weak demand for its IT consulting services, the problem of weak top-line growth remains. Recent U.S. GDP report highlights that while consumer and government spending is healthy, business capital investment remains weak. S&P thinks business spending is a good proxy for demand for CIBER's services, and is cutting the 2002 EPS estimate from $0.35, to $0.25, on a projected revenue growth of 9%, vs. S&P's prior 17% expectation.

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