Certainly, the possibility of a "bottom" could occur in Oct of this year. Even though it is still about 12 weeks away, the present environment looks like it could happen. If it does happen, the circumstances that cause the bottom are much different this time than in 02.
In 02, "this year" and "next year" earnings for the semi-equips were in very bad shape, even in Jun of 02. History shows that these estimates continued to decrease in concert with stock price decreases as we headed into the bottom on 9 Oct. This year, earnings estimates, and actual earnings are very good, and at least for now, are not decreasing as they were in 02. To show the difference, the first table below shows the earnings estimates in Jun 02, and the earnings estimates in Nov 02(the low point, from that date they started back up).
- 6/29/02 11/27/02
- EARNINGS EST EARNINGS EST
SYMBOL CURR YR NEXT YR CURR YR NEXT YR
AMAT 0.19 0.50 0.20 0.50
ASML -0.16 0.49 -0.23 0.10
ASYT -0.20 0.89 -0.77 0.15
ATMI -0.05 0.83 -0.31 0.03
BRKS -1.50 0.30 -1.53 -0.27
CMOS -1.25 -0.54 -1.26 -0.69
COHU 0.02 0.61 -0.13 -0.19
CYMI 0.73 1.50 0.38 0.42
DPMI 0.21 0.68 -1.21 0.28
EGLS -2.89 -1.77 -2.94 -2.24
FSII -1.05 -0.26 -1.21
HELX -0.32 0.30 -0.49 -0.09
KLAC 1.18 1.83 0.64 1.09
KLIC -1.38 -0.54 -1.05 0.06
LRCX 0.26 0.66 0.03 0.41
LTXX -0.63 -0.29 -0.78 -0.22
MTSN -2.19 -0.88 -2.05 -1.10
NVLS 0.29 0.97 0.27 0.46
PHTN -0.26 1.05 0.65 0.12
PLAB 0.13 0.31 0.06 0.04
SMTL -0.46 0.17 -0.29
TER -1.17 -0.04 -1.18 -0.30
UTEK -0.25 0.42 -0.78 -0.23
VECO 0.11 0.72 -0.11 0.26
WFR -0.20 0.45 -0.36 0.38
TOTAL -10.84 8.36 -14.45 -1.03
Note earnings estimates at the bottom line were lousy in Jun and continued on down into Nov. Contrast that scenario with the present situation. The table below shows the latest earnings estimates. On top of that we have earnings reporting season in the next few weeks, and earnings are going to be very good. Not only that, but even doomsday analysts like CSFB now admit that the 3rd quarter will be flat to up, with probably a 10 percent q/q falloff in the 4th quarter. This is hardly the picture of an environment to produce a bottom in Oct. Nevertheless, it looks like it could easily happen at this point. Other factors than earnings estimates are obviously driving this latest downtrend.
EARNINGS EST
SYMBOL CURR YR NEXT YR
AMAT 1.05 1.18
ASML 1.17 1.35
ASYT 0.57 0.64
ATMI 1.00 1.32
BRKS 0.74 0.92
CMOS 0.18 0.38
COHU 0.75 1.26
CYMI 2.51 2.92
EGLS -0.12 0.00
FSII -0.29 0.34
KLAC 1.82 2.58
KLIC 0.97 1.00
LRCX 2.37 3.17
LTXX 0.30 0.74
MTSN 0.53 0.54
NVLS 1.43 1.45
PHTN 0.71 0.75
PLAB 1.11 1.30
SMTL 0.29 0.72
TER 0.98 0.92
UTEK 0.28 0.78
VECO 0.91 1.37
WFR 1.73 2.16
TOTAL 20.99 27.79
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