Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 320.14

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To: Proud_Infidel who wrote (11717)	10/14/2004 12:05:29 PM
From: Proud_Infidel	Read Replies (1) of 25522

Applied Materials Facing Downside Risk 10.14.04, 11:59 AM ET Goldman Sachs lowered earnings estimates for Applied Materials (nasdaq: AMAT - news - people ), citing worse-than-expected order and shipment outlooks from Lam Research (nasdaq: LRCX - news - people ) and Novellus Systems (nasdaq: NVLS - news - people ). Goldman lowered the calendar 2004 earnings-per-share estimate for Applied Materials to $1.00 from $1.08, and slashed the calendar 2005 estimate to 85 cents from $1.35. The research firm said it had expected SAB-101, a revenue recognition accounting principle "that allows sales to be recognized on systems that were shipped when business was more robust," would allow revenue in the semiconductor-equipment industry "to remain flattish over the next few quarters," but following Lam's and Novellus' reports it appears that managements "are choosing to slow down shipments and manage backlogs, which has the effect of driving revenue down sooner than we expected." Goldman said stock downside is "likely" because "the market is pricing in 10% long-term free cash flow growth while the industry has grown at a 1% compounded annual growth rate over the last two cycles." The firm said there is downside risk for Applied Materials "as long as the market continues to expect a short and shallow downturn while the fundamental reality more likely points to a normal downturn with several quarters of significant order declines." Didn't some of the CC's actually say they were looking at a shallow downturn.....in those exact words? It seems to me that the last statement is either disingenuous or outright misleading. Brian

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