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Politics : Formerly About Applied Materials
AMAT 225.18-1.5%Nov 18 3:59 PM EST
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To: Proud_Infidel who wrote (15220)2/1/1998 12:00:00 PM
From: Big Bucks  Read Replies (3) of 70976
 
BK,

Re: How do you see October '97 as the bottom?

<. If we take Oct as the start of the down cycle>

My contention is that we are very close to reaching the bottom
of order cancellations/delays due to overcapacity and fab push-outs.
If I am correct, then we have about 3-4 more months of order weakness
for '98 which will take us into AMAT fiscal Q3. Right now the
outstanding order backlog is the buffer "lag" which accounts for the
higher earnings q-q. Same thing happened in '96-97 which is
"confirmed" by using your Rev numbers. The chip industry turned
down starting in May/June but the earnings/Rev effects weren't really
felt until about Oct due to the lag in new orders. The depressed Rev's
decreased, which lasted for about 4-6 months before showing an
increase again.

Qtr. Revs
07/28/96____ 1115.4
10/27/96____ 861.0
01/26/97____ 835.8
04/27/97____ 900.9
07/27/97____ 1057.2
10/26/97____ 1280.4

I think we are in the same scenario again. AMAT will gather strength
and market share due to this downturn but will be penalized by
investors, due mainly to the weak semi-equip/chip sector, not due to
any real issues or problems inherent within the company. It is at the
"mercy" of the market perception rather than being rated on the
merits of its' business plan and superior strength at this time.

Just my opinion.

Regards,
BB
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