Looking Ahead Print version
Updated: 17-Nov-04 11:30 ET
11:30 ET
Previewing Applied Materials (AMAT): After Wednesday's close leading chip equipment company Applied Materials will report its fiscal Q4 (Oct) results. According to Reuters Estimates. AMAT is expected to post a profit of $0.26 on revenue of $2.29 bln. The consensus outlook for fiscal Q1 (Jan) is EPS of $0.24 on revenue of $2.15 bln.
What AMAT Said after its Fiscal Q3 Report
Expects Q4 orders up 5% from Q3 levels, revenues that are flat to up 5% from Q3, and EPS of $0.24-$0.26. Reuters Estimates consensus EPS and revenue figures at the time were $0.27 and $2.29 bln
Trader Focal Points
Comments on push-outs/cancellations
Product Mix Shipment
Quality of Earnings
Inventories
Guidance
A Taste of What Analysts Are Saying
Thomas Weisel Partners (Nov. 16) - expects a weak Jan Q outlook for AMAT consistent with industry trends. The firm expects the company to meet its Oct Q rev and EPS estimates of $2.33 bln ( 4% q/q) and $0.27. The firm notes recent weakness anticipates negative outlook and possible relief rally as negative news clears. Consistent with the firm's view that AMAT will not disappoint by issuing order growth guidance below that of its peers, the firm believes that investors will react positively to an AMAT confirmation that the current deterioration in equipment orders is slowing, rather than accelerating. The firm notes FY05 numbers still at risk and reiterates its Peer Perform rating
ThinkEquity (Nov. 16) - When Applied reports its FQ4, we expect a bleak outlook for its FQ1... We expect Applied to guide for a 10 - 20% decline in FQ1 orders. However, the market is likely to value the stock based on April orders, which could be down another 10 - 20% before picking up in July
Moors & Cabot (Nov. 15) - We anticipate the Company will meet our recently revised forecasts of $2.2 billion in revenue and $0.23 in EPS. In terms of bookings, we are now forecasting a sequential uptick of 3% or $2.53 billion. Going forward, we suspect the Company will guide orders down sequentially by approximately 10-15%. We suspect that the Company has witnessed a sharp slowdown of order flow from the foundries. We believe Applied has received some support in bookings trends from DRAM suppliers, as well as the Japanese chipmakers. In total, we expect the Company to deliver a much more cautious tone and cite heightened uncertainty that may extend for the next few quarters.
Prudential (Nov. 12) - We believe AMAT will meet our earnings and revenues estimates of $0.25 and $2.25 billion for FQ4. Bookings should be in-line with the +5% guidance. AMAT guided 4Q orders to be +5% and we expect the orders to be in that range. We believe some DRAM companies placed orders in F4Q instead of FQ105, which partially offset the drop-off in orders from foundries. Expecting order guidance of -10% to -20% for FQ1. We think revenue guidance for FQ105 will be -10% to -20%. We are currently estimating FY05 at $0.89 versus consensus of $0.97, and we believe consensus numbers are currently too high.
J.P. Morgan (Nov. 11) - We expect Applied to report F4Q04 (Oct) gross orders of $2.58B (up 5%). We are forecasting revenues and EPS of $2.27B/$0.26 for F4Q04, versus guidance of $2.23-$2.35B / $0.24-$0.26. We expect Applied to guide for F1Q05 revenues to decline by 15-20% driven by a few (well publicized) shipment push outs, combined with delayed revenue recognition from shipments to greenfield fabs. Current consensus is $2.27B/$0.26, and we are lowering our F1Q05 estimates to $1.94B/$0.19 from $2.55B/$0.30. We now expect up orders in F2Q05 (April). We expect Applied to guide to a F1Q05 bookings decline of 15%-20%. More importantly, we now believe Applied's F2Q05 bookings could be up 5%+, marking an inflection in bookings momentum.
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