Formerly About Applied Materials Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials

AMAT 265.39

+4.2%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Fred Levine who wrote (35521)	6/22/2000 10:21:00 AM
From: Katherine Derbyshire	Read Replies (4) of 70976

>>Please straighten out my apparent confusion about the utility of the B to B ratio. It seems to me that as billings increase, it becomes more difficult for bookings to increase proportionately, and therefore we can have huge increases in earnings with a decrease in B to B.<< B2B is a forward looking indicator, earnings are a backward looking indicator. A B2B above 1.0 means that the equipment companies will ship more equipment in the future (bookings) than they are at present (billings). I.E. the industry is growing. A B2B below 1.0 means that equipment companies are living off their backlogs--they are filling existing orders, but new ones aren't coming in. >> Billings should determine earnings and not bookings. << Yes, that's correct. But bookings determine what billings (and earnings) will be in the future, which is why industry watchers see a falling B2B as a bad sign. And why you'll see the stocks go down even on strong earnings if B2B is falling. At the same time, it is normal for the B2B to spike up at the beginning of a cycle and then settle back. When the cycle turns, orders come in faster than the equipment companies can ramp up to meet them. But as the equipment companies hire more staff, light fires under their suppliers, etc., shipments start climbing and B2B comes down even with healthy growth in bookings. That's what I think has happened this month. A B2B of 1.30 is still very very good. Katherine

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next