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

To: Jacob Snyder who wrote (57771)	12/19/2001 2:00:07 PM
From: Jacob Snyder	Respond to of 70976

more: 12/13/01: we believe some of the work force reduction represents further outsourcing moves by Applied. Applied has cut headcount by roughly 1/3 from 22,500 at the peak to 15,000 currently Although this is less than the dramatic drop in revenues at Applied and the industry in this downturn, this is Applied’s largest headcount cut in a downturn - even though AMAT has more product lines than ever before to support. Increased outsourcing and manufacturing efficiency improvements have allowed such drastic headcount reductions and should help with increased margin leverage when growth returns. Watch for similar moves by other companies in the near term. We expect that other semiconductor equipment companies will be following Applied in the next 1-2 months as they better gauge the bottom. We maintain our Strong Buy Rating. Although the near term remains uncertain and the stock will remain volatile, as more evidence that the bottom is occurring develops we believe investors will look toward 2003 and 2004 for the next upturn in order to value Applied. Historical growth rates for Applied would suggest that 12 months out the stock could be valued at over $60 on a projected second half 2003 EPS run rate of $2.00. This provides a 36% upside potential within 12 months, with further potential upside for longer term investors if 2004 proves to be a typical second year growth period for an expansion cycle. B. Hodess)