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Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 223.95+1.7%Nov 21 3:59 PM EST
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To: etchmeister who wrote (24887)2/24/2011 8:07:19 PM
From: Cary Salsberg   of 25522
 
Book to Bill is a nice simple number, easy to understand, in terms of its definition, but Book to Bill doesn't have the same import it had when the industry was caught in the throes of "stupid cycles."

Orders are recorded when shipments are scheduled up to 12 months out. So, orders may be more or less than revenue for individual months and orders may peak in a particular month, but that tells little about the shipment schedule and the revenue flow that follows. It makes sense to order early because that increases the chance to get a slot in the equipment makers schedule but the early order may be for 12 months out. Orders may fall for a period because previous orders heavily booked the equipment makers for the next 12 months.

Revenue forecasts for 2011 and 2012 are what is important. Bookings to achieve these revenues need not follow any meaningful monthly pattern, except to add up to the annual revenue forecasts.
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