CSFB on BTB:
SEMI August BTB ahead of expectations, but lagging reality
•Book-to-Bill ahead of expectations, but is a lagging indicator. SEMI reported August Book to Bill Wednesday after the close. Ratio was 1.14, ahead of our expectation for 1.03 and consensus of 1.01, but down from 1.26 in July (revised up from 1.18). Remember that book-to-bill is a lagging indicator and Aug. data reflects AMAT’s initial guidance for down 5-15%, rather than current conditions. Bookings -5% vs our expected –10% and billings +1% vs. our expected +1%.
•Back-end a leading indicator, drops below parity. Back-end bookings declined 21% to $142.1m and billings increased 7% to $184.5m, driving BE B:Bill of 0.87; third consecutive monthly decline from May peak of 1.40. BE again serving as leading indicator, accelerating down ahead of FE. Front-end bookings declined 2% to $979.6m, billings flat at $796.7, driving b:bill of 1.23. Although FE held up better than expected, we believe data does not reflect current environment and could see company bookings decline 20-25% in C3Q.
•Year-end trade looking less likely. With H202 dampened relative to normal seasonal patterns, we believe SCE bookings are poised for a 3-quarter downturn, with trough in 1Q03. Our visit to Asia confirms our belief that capex will continue to have a downward bias, putting pressure on SCE revenue estimates which still average 24% growth in 2003. With prospects for a recovery pushing out and dampening, we remain underweight SCE. |
