Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 228.64

+1.1%

3:59 PM EST

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To: 16yearcycle who wrote (26430)	11/18/1998 10:41:00 AM
From: Jeffrey D	Read Replies (1) of 70976

Some Bear food for you from H&Q this morning. Jeff <<AMAT Reports Strong Quarter . . . But Weak Guidance * Applied Materials reported Q4:FY1998 operating results of $0.07 on $673 million in revenues, $0.02 above our street-high estimate and $0.05 above consensus. Including the one time charges totaling $293 million, the reported loss per share was ($0.51). * On the balance sheet, cash and equivalents increased to $1.76 billion from $1.6 billion. Receivables declined from $815 million to $765 million but DSOs rose to 103 days from 84 days. Inventory also declined from $633 million to $556 million but increased to 130 days from 117 days. Book value declined to $8.49 from $8.62. * New bookings were $684 million, above the company's guidance of $600-$675 million. This resulted in a gross book-to-bill of 1.02 to one. Net of $99 million in backlog adjustments, net bookings were $585 million and net book-to-bill was 0.87 to 1. Ending backlog was $917 million. * The company guided for sequentially lower orders of $600-$675 million in the first quarter. This guidance is significantly below our expectations of guidance for $675-$725 million in new orders. We believe this news may be a negative catalyst for the stock. * We are lowering our estimates for Applied Materials. For Q1:F1999, our new estimate is $0.05 on $650 million, down from $0.08 and $700 million. For FY99 our estimate is $0.60 on $3.1 billion, down from $0.72 on $3.35 billion. For CY1999, we expect $0.84 and $3.5 billion, down from $1.00 on $3.75 billion. * We are maintaining our Buy on Applied Materials. However, we believe that this conference call will be a negative catalyst for the stock. Although the company reported better than expected earnings and better than expected bookings, new order guidance for the first quarter is below expectations and the company continues to be vague as to the timing of a significant pickup in orders. We reiterate our belief that the worst is over. The only remaining issue is the timing and strength of the upturn. We would be aggressive buyers of the stock in the $28-$32 range as its long term prospects continue to brighten as the company trims costs off its operating model and solidifies its leadership position in capital equipment.>>

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