RtS, Thanks for the pointer to the article and your picking out the points of interest. I agree with many of the author's points, but I take some exception to the following comment he made.
The forward earnings of the Semiconductor Capital Equipment group tend to be correlated with the industry’s book-to-bill ratio. Earnings estimates for the next 12 months have been rising since the start of the year despite downward revisions for this year because 2004 is expected to be well above 2003. Nevertheless, the book-to-bill ratio has weakened slightly in recent months.
The part in bold is not so, as shown in listing I just posted earlier tonite on the last years earnings estimates.
Message 19084543
In the table, the estimates were about their lowest around mid November 02. Then the numbers started rising. I didn't get any data points between 12/19/02 and 2/14/03, but the sum of the estimates for the 2 years went from -11.06 to -2.39. That is a fairly good comeback, but the rest of the table shows a falling off of estimates since then. Again, there are no data points between 2/14/03 and 6/7/03, but the estimate for the Group fell from -2.39 to -5.61 over that period. Since then in the past month it has fallen further to this weeks number of -6.80.
What the numbers show, say a month from now remain to be seen, but so far, the analysts do not see a turn around. I will feel a lot better about future prospects when I see some "substantial" upward revisions to estimates.
Don |
