Semi-Equips - Buy when BLOOD is running in the streets! 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.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 159.33

-3.3%

Nov 7 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Cary Salsberg who wrote (10594)	8/14/2002 11:00:55 AM
From: Robert Douglas	Read Replies (2) of 10921

Bear Stearns' take on AMAT's earnings: Key Points Last night, Applied Materials reported 3Q earnings coming in at $0.07 per share ahead of our five cent per share expectations. Revenues were up 26% sequentially to $1.46B and also nicely ahead of our expectations. Orders were up 5% from the previous quarter which was below last quarter's guidance of 10% but above recent street expectations of flat orders. One of the key metrics that investors were looking for was forward order guidance which Applied gave out at down 5 to 15%. In our view this number is more or less in line with expectations and not very different from other semiconductor equipment makers who have said flat to down 10%. Given that Applied is one month behind most companies in its reporting schedule they have seen more of the current weakness in their quarter and are probably a more accurate near term barometer. The other key data point was order cancellations or pushouts which came in relatively low at $77M of cancellations which sounds to be more or less in the normal range for the level of business and it also seemed that many of those cancellations were initiated by Applied. The company has $3.3B in backlog which is a relatively healthy amount (slightly less than two quarters worth) . Order patterns were somewhat skewed from last quarter, with Taiwan falling off sharply but Japan and North America picking up nicely but not enough to offset al of the Taiwanese reduction. Southeast Asia and China were also up in orders. It seems clear from the data that the Taiwanese foundries are quickly backing off the gas of capex. Japan, which has been dead in the water for some time is seeing signs of life which is similar to comments from other semiconductor equipment companies. We recommend the shares of Applied Materials as Buy with a one year price target of $40 per share based on about 8.6 times book value of $4.67 per share. We have slightly adjusted our estimates for FY2002 to $0.15 per share up from $0.13 per share and for FY2003 to $0.65 per share up from $0.60 per share. Guidance was for flat to up revenues and slightly up EPS. In our view, if we weigh all the factors, the AMAT report was better than expectation (expectations had been set relatively low) and while things are weakening we are still way better off than the trough of nine months or so ago. Given the attractive levels that the stock is trading at we would continue to accumulate shares pending a resumed recovery. We feel the downside risk is minimized and the street seemed to be braced for a more negative call which did not materialize.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next