Brian/all, Bloomberg story on AMAT's stock price decline. It is interesting to note that even with the recent drop AMAT has risen 30% this year. Jeff
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Applied Materials, Chip-Equipment Maker Shares Fall for 2nd Day
Applied Materials, Chip-Equipment Maker Shares Fall for 2nd Day
Santa Clara, California, Feb. 26 (Bloomberg) -- The shares of Applied Materials Inc. and other chip-equipment makers tumbled for a second day on concern that slowing personal-computer sales will lead semiconductor companies to buy less of their products.
Applied, the No. 1 chip-equipment maker, fell 8 1/2 to 55 5/8 in trading of 21.6 million shares, making it the fourth-most active U.S. stock. The shares have dropped 18 percent in the past two days. Lam Research Corp. fell 4 1/8 to 29 9/16.
Chip-equipment makers rely on chipmakers for orders and stand to sell less if companies such as Compaq Computer Corp., the biggest PC maker, buy fewer microprocessors. Compaq fell 14 percent on concern that its first-quarter sales and profit won't meet forecasts. ''If there's a slowdown in PC unit sales growth, it means the recovery (in the chip-equipment industry) will be slower than expected,'' said John Pitzer, a Prudential Securities Inc. analyst. ''People have been taking as a given that demand was robust.''
Novellus Systems Inc. fell 6 to 59 1/16, while Teradyne Inc., the biggest maker of chip-testing gear, fell 8 to 48. Kulicke & Soffa, a maker of chip-assembly tools, fell 3 1/2 to 25 3/8.
This week's decline comes after chip-equipment shares have surged this year on signs that orders were rebounding from a yearlong slump that dragged into the fourth quarter.
Applied, based in Santa Clara, California, rose to a record last week after the company's fiscal first-quarter profit doubled expectations and it said earnings this quarter also would double estimates. It's still up 30 percent since the beginning of the year.
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