This business is so cyclical that Cymer could make $2.50 next year, or they could be back in the red
Although Cymer is always going to be more cyclical than someone like Merck or Microsoft, over the long run it is going to be much less cyclical than most other semi-equips. Their service and spares parts revenue should be higher than average, resulting in more of a "smoothing" of revenues. Also, companies will have to continually upgrade to the next generation of lasers, or else they will be left behind on the cost curve.
FWIW, if you use Akins' 2000 laser market projections of $500M, June 97's 15% after tax net, and assume 34M shares outstanding, you get a $2.21 EPS. Note that their margins will probably higher than in 1997, but offset by a higher tax rate and loss of some market share. In 2001, with a $750M laser market, you get $3.64 EPS.
Jay |
