<<The order from AMAT was a three year deal that created the book to bill . Take a look at the announcement. the chart merely reflects the events and my question was why did it take a week. >>
According to what I can see looking at the news wire, the AMAT deal was announced on June 2. On June 2, the stock was up $1 on 2X normal trading volume. So I don't quite understand why you keep asking why the market take so long to react to this news. This news is old and has been already discounted in the price of the stock. The information regarding the book to bill was disclosed in their 3rd quarter 10Q which covered the qtr end 3/31/99 and was filed on May 11. This was almost a month before the AMAT deal was announced. Here is the link:
sec.yahoo.com
<<BACKLOG
Backlog consists of purchase orders for standard products and contracts for research and development. At March 27, 1999, backlog was approximately $26.3 million of which $25.6 million was for standard products and $675,000 was for research contracts. We had record bookings of $34.4 million and a book-to-bill ratio of 1.6:1 for the third quarter of 1999. The backlog at March 28, 1998 was approximately $19.3 million of which $18.7 million was for standard products and $607,000 was for research contracts. We expect to complete all standard product backlog during the next six months and all research contract backlog during the next twelve months. The backlog figures exclude orders under certain just-in- time supply agreements with major semiconductor capital equipment manufacturers. These multi-year supply agreements, as well as certain government contracts, typically provide for cancellation or modification with little or no penalty. In addition, customers may push out deliveries, put firm orders on hold, or cancel existing firm orders with little or no penalty.>>
As you can see, the AMAT deal will add to the next qtr's backlog and beyond until the contract runs out or AMAT cancels it. The backlog is orders that the company "expect(s) to complete all standard product backlog during the next six months and all research contract backlog during the next twelve months." So if my math is correct, then the 4th qtr backlog should show an increase of $23 Million or so over the 3rd qtr.
Because any of these orders can be canceled, AMAT included, I only want to watch the progression of their backlog and eps each qtr. I also will watch the technical action of the stock as well. As their revenues ramp up, I would hope to see improvements in gross and net margins. The next few qtrs will show us the way.
Do your own due dilligence.
Goolie |
