Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 326.66

-0.6%

9:55 AM EST

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To: derek cao who wrote (23364)	8/26/1998 5:54:00 PM
From: Henry Eichorszt	Read Replies (2) of 70976

FROM SMARTMONEY- Chip equipment companies still seem to be searching for a bottom. The whole group suffered Wednesday morning following Applied Materials' announcement that it would trim 15% of its workforce and take a onetime charge in the October quarter. Analysts had been expecting earnings of 3 cents per share for the period, but now the company will likely report a loss. AMAT said the moves were necessary due to slumping sales. It cited the usual suspects: economic woes in Asia, a worldwide glut of memory chips and the shift to cheaper PCs. "They've done essentially what we'd expected," says analyst Kelly Pierce of SG Cowen, noting that Applied Materials had delayed layoffs longer than most of its chip equipment brethren. "They held off as long as they could." When the company reported its dismal quarterly results earlier this month, it suggested that a restructuring plan was on the horizon. Pierce says that if orders continue to deteriorate, more changes could be in order. Still, he is cautiously optimistic. "We are expecting the June and September quarters to be the bottom," he says. "But forecasting in the fog is quite difficult." ---

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