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Politics : Formerly About Applied Materials

AMAT 254.76

+1.0%

3:25 PM EST

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To: Jacob Snyder who wrote (20321)	6/13/1998 8:19:00 PM
From: Ramsey Su	Read Replies (3) of 70976

Jacob, I use Zacks as my source for future earnings estimates. 1998 estimates for many companies including AMAT have been revised downward. With so little forward visibility, most 1999 earnings are pretty much wild guesses. At the moment, Zacks consensus still gives AMAT $1.75 for FY 1999. This is obviously based on the assumption of the industry recovering by then or is this just a "lack of any better number" estimate? Per my unscientific observation, this is applicable to quite a few companies that I follow. This is rather troubling if everyone is assuming that 1998 is just a bad year and 1999 will be back to business as usual. The current stock prices certainly reflect those numbers. What if it takes longer than 1999? Using AMAT as an example, FY 1997 earnings were $1.39. FY98 is now at $1.38. If FY99 is eventually revised dn to $1, what type of a GROWTH stock do we have here? What PE should we be assigning to this cyclical? Which year's E should we use as a base yr? Ramsey

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