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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Joe NYC who wrote (80065)	5/14/2002 6:23:26 PM
From: SteveC	Respond to of 275872

The aftermarket likes AMAT's results: AMAT +1.32 AMD +0.25 INTC +0.16 Hopefully tomorrow will be similar to last week after Cisco's earnings. ==================================================== Reuters Technology Report Applied Materials Tops Estimates By Daniel Sorid NEW YORK (Reuters) - Applied Materials Inc. (NasdaqNM:AMAT - News), the No. 1 maker of tools used to produce microchips, on Tuesday reported a second-quarter profit and said renewed demand for consumer electronics helped push orders up 51 percent, topping Wall Street expectations. The Santa Clara, California-based company also predicted a 10 percent to 15 percent rise in orders for the third quarter. Shares of Applied Materials rose to $27.95 in after-hours trade on Instinet, after rising 4.1 percent to $26.64 in regular-hours trade. New orders, the most-watched leading indicator for chip equipment makers, rose to $1.69 billion from $1.12 billion in the fiscal quarter ended April 28, blowing away Wall Street expectations, which peaked at around $1.5 billion. "I think that came in way above even the wildest expectations," Bear Stearns analyst Robert Maire said. Applied Materials said it earned $52 million, or 3 cents a share, in the fiscal quarter, from a year-ago profit of $318 million, or 19 cents a share. Wall Street had expected earnings in a range of 1 cent to 3 cents a share, with an average estimate of 2 cents, according to a survey of 27 analysts by research firm Thomson Financial/First Call. Net sales -- which measure the value of products that have been ordered, produced and received by customers -- were $1.16 billion, up 16 percent from the first quarter. "In the semiconductor industry, we've seen a moderate recovery, driven by strong consumer-related demand and a strengthening wireless market in Europe and Asia," Applied Materials Chief Executive James Morgan said in a call with analysts. Factories that make chips for advanced electronics are generally approaching their limits, Morgan said, leading to a jump in investment in advanced semiconductor production tools. Still some segments of the economy, such as telecommunications and corporate information technology spending, are lagging, he said. Nevertheless, orders grew strongly. The company said 21 customers placed orders in the second quarter in excess of $10 million, compared with only 11 customers with orders at that level in the first quarter.

To: Joe NYC who wrote (80065)	5/14/2002 7:38:42 PM
From: Petz	Read Replies (2) \| Respond to of 275872

I heartily endorse S&P's new earnings benchmark. New costs included in earnings calculation, excluded by GAAP: stock options granted to executives... - it probably includes all stock options granted, not just to executives. I've read this will hurt AMD earnings more than Intel's, but that may have been just a year 2000, 2001 thing when AMD's stock price soared relative to Intel's. writedowns of depreciable assets... - these are included in GAAP earnings, but typically excluded from "pro forma" earnings. Unfortunately, this does NOT force companies to write down acquisitions or restore amortization of acquisitions to earnings. This will hurt Intel more than AMD. I am convinced that Intel has a pile of acquisition and fab-related writedowns they want to take as soon as they have decent earnings. When they do that, Intel's earnings statement may still read, "Pro forma earnings were 0.50 per share, excluding one-time writedowns of $0.40 per share." They can still say that, but S&P will calculate their PE based on less than 0.10 of earnings. purchased research and development and pension costs... - I believe these are part of GAAP earnings, but, again, not included in "pro forma" earnings. It will have little effect on AMD. It wouldn't have affected Intel last quarter because they didn't purchase anything substantial. Items to be excluded include gains and losses on asset sales, unrealized gains or losses from hedging activities... - This is as it should be. I hope S&P goes back a few years and restates the inflated earnings of many of the big cap tech stocks. If corporations stock portfolios ever skyrocket again, at least it won't be reported as earnings. Items to be excluded include fees related to mergers and acquisitions and legal settlements Not really sure why a fee a company pays to make an acquisition shouldn't be recorded as an expense, but neither one is very significant. EDIT - QUESTION - Are the PE numbers published in newspapers based on GAAP earnings, Pro-forma earnings or S&P's definition? What about Yahoo and other internet sites? Petz