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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (40107)	11/29/2000 10:38:00 AM
From: Tony Viola	Respond to of 70976

Michael, >What would be amat earnings/revenues quarter by quarter vs last year if we do have a hard landing or even a moderate recession? Do you think even Morgan, with his CFO and staff could predict that? Well, nothing to stop from rattling on about it anyway. Depends on what the chip makers hear from their customers, the PC, server, cell phone, router, Playstation, etc. makers about their production plans. Then, if the boxmakers and other system makers do signal a slowdown, how much do the Intels, IBMs, NECs, TIs, Samsungs, etc. of the world slow down their purchases from AMAT. 0.13 micron, copper and 300 mm have to be the big drivers for AMAT from now on, in that order, probably. A lot of the mid-tier companies, like LSI, don't absolutely have to upgrade to that holy trinity. I've heard Wilf Corrigan of LSI say he doesn't care if they're 12th or 13th to go to 300 mm. They don't want to be the guinea pig, rather let an Intel or IBM do it. After all that rambling, a recession and accompanying moderate slowdown could probably affect AMAT a lot, because those new drivers (0.13 micron, copper and 300 mm) are not absolutely necessary to very many chip vendors, if any. OTOH, I know that Intel, e.g., is far down the road to moving to production on 0.13 with copper in 2H01, 300 mm about half a year later. I'd bet most of the other top 10 in semis would be something like that also. Tony

To: michael97123 who wrote (40107)	11/29/2000 11:00:27 AM
From: brunn	Respond to of 70976

What would be AMAT's earnings/revenue quarter by quarter vs. last year if we do have a hard landing or even a moderate recession. In 1996 and 1998 AMAT's business went into a recession even if the U.S. did not. Remember, AMAT has more customers overseas than they do in the U.s. Quarterly revenue fell 25% in 1996, 50% in 1998. Earnings fell to near break even (profits less than 10 cents per share.) I expect similar drops as a reasonable worst case scenario. If this occurs we may not see too much more damage in the stock price. AMAT's fall in stock price has pretty much factored in this worst case scenario--I would guess there would be a further drop but just as the market predicted the downturn prematurely there will be value/growth investors wanting to get in early (and cheap) on the way back up. Also, by the time AMAT reports or predicts the worst financial results, people will begin trying to calculate the improved financial performance that has taken only a couple of quarters to see in 1996 and 1998.