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Politics : Formerly About Applied Materials
AMAT 326.73-1.1%10:10 AM EST
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To: Justa Werkenstiff who wrote (32147)8/19/1999 10:00:00 PM
From: Ian@SI  Read Replies (2) of 70976
 
Justa,

Let my Pollyanna eyes take their best shot.

1. With the July report, the orders for June(preliminary) looked as though they had fallen sequentially from May(revised).

With this report, the numbers for June(revised) are greater than May(Final). So what looked like a sequential drop in bookings was really an increase.

Methinks that these early estimates of bookings and billings are given far more credibility than they deserve.

2. Orders remaining 20% more than billings indicates that the backlog is growing substantially, that lead times are extending, and that there's a risk of customers going elsewhere to get the desired delivery dates.

i.e. A book to bill sustained over 1.20:1 is undesirable unless you make a shoddy product and that's the only way you can get a sale.

With billing above $1.4B monthly, it's probably desirable to have orders not much more than 5% higher - a steady manageable growth that still permits customers to get satisfactory delivery dates.

We can quibble whether the point where slower growth becomes desirable is 1.4B or 1.6B or whatever. But book to bills above 1.2 are really not desirable for anybody.

++++++++++++++++

Well how'd I do? Did I find any good news?

I think I agree with your conclusion. The street is going to sell first and think later.

Ian.
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