Jacob,
Re: The Adam Harness estimates
Applied Materials Inc. (AMAT) 33 +7/8: Adams Harkness lowers estimates on maker
of semiconductor wafer fabrication equipment as visibility is poor and there are no signs
that a recovery is near; maintains "market perform" rating, but lowers FY98 EPS from
$1.20 to $1.11 a share and FY99 from $0.72 to $0.13 a share....
Let's assume for a minute that AMAT does earn .13 for FY99 and try to work it backwards to see what exactly what would mean for the industry.
385,000,000 * .13= $50,050,000 Net income for FY99
Using the most recent Net Margins of 8% as an average for the year, AMAT would have about $632,000,000 in sales for the entire year! Talk about a low bar to hurdle. Some believe we are trolling the bottom now, and we got 608M in orders this Q. As I've said before, FY99 eps estimates are guesses and people buying today are not looking at these estimates seriously. BTW, the actual sales numbers may be higher b/c of charges, lower margins etc etc. I was only trying to show how low they appeared to me.
Further, assuming AMAT is ~20% of the industry, that would indicate total capex spending next year of 3.1Billion. If you could find estimates for capex this low, please post.
BK |
