You heard it here first.
I just spent some time bringing my EPS model up to date. I figure in Y2K they will do over the outlandish number of 3.00.
The following is a summary from a PM I just sent someone.
I don't have any idea how the analysts can be so far off.
In the past my Y2K estimate of $2 was based on some numbers Akins presented at last year's annual meeting. I used his estimate of the lithography market in Y2K of $500 mil. (I don't remember if this includes service and spares.) I used an after tax rate equal to their last great quarter, June '97. All this netted to something like $2.25.
Yesterday I decided it was time to use a slightly more precise model for Y2K. I conservatively figured they will grow their backlog this Q by 35%, then 20%, 15%, and 10% sequentially in the following 3 quarters. Assuming they sell their backlog (which they did last quarter), this nets to Y2K sales of $609 mil, which isn't that far above Akins' projections last May of $500mil.
Last May he said their goal was a gross margin of 45% achievable by Q4 00. Margin last Q was 37%. Consequently, I used margins of 39%, 40%, 42%, and 45%. Adding in healthy increases in expenses, using a 38% tax rate (guided by Angus last Q) and shares outstanding of 31.5 mil, I get Y2K estimates greater than $3.
If I am anywhere close to correct, we will by a $200 stock by Q4 00.
FWIW
Jay |
