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Politics : Formerly About Applied Materials

AMAT 259.92

-1.1%

Dec 30 3:59 PM EST

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To: jbershad who wrote (1791)	9/3/1996 12:39:00 AM
From: Cary Salsberg	of 70976

Jerry, NVLS has held up better than other semi-equips because concensus earnings estimates for NVLS in 97 are higher. The last estimates for AMAT are $3.35 for 96 and $1.82 for 97, while for NVLS they are $5.95 for 96 and $4.28 for 97. The question then becomes, why are the estimates higher for NVLS. The answer is that at the last earnings report NVLS had a btb of greater than 1.0 compared to 0.8 for AMAT. As far as the effect of bad news, the disappointing AMAT and KLAC reports put an end to a budding semi-equip post earnings rally just a few days after they went up 10-15% in a single day. They are all below that day's level. I agree that the stock prices discount the present sharply reduced concensus earnings estimates for 96 and 97, BUT I am concerned that the next few earnings reports will further lower the estimates and along with them the stock prices. I don't understand why NVLS is going to perform much better than most of the other semi-equips during this downturn and I expect this disparity to start being corrected when they announce their next earnings report. Cary

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