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To: Johnny Canuck who wrote (40038)	8/12/2003 8:59:55 PM
From: Johnny Canuck	Respond to of 70070

Applied Materials posts loss By Reuters August 12, 2003, 5:15 PM PT Applied Materials, the world's largest maker of microchip production tools, swung to a quarterly loss on Tuesday, as chipmakers held off on plans to aggressively expand and upgrade their factories. New equipment orders, an indicator of future revenue, fell 41 percent in the quarter to $1.05 billion from a year earlier, but came in above the company's target of about $970 million and 9 percent higher than in the second quarter. "The orders are up 9 percent, which is higher than what people were expecting. All-in-all, I'd be a buyer of the stock," said Sunil Reddy, a manager of the Fifth Third Technology Fund, which owns Applied Materials shares. In its fiscal third quarter ended July 27, Applied Materials said it lost $37 million, or 2 cents a share, compared with a year-earlier profit of $115 million, or 7 cents a share. Excluding a charge for restructuring and job cuts, the Santa Clara, Calif., company said it would have posted a profit of $78 million, or 5 cents a share. Net sales declined to $1.09 billion from $1.46 billion last year. Wall Street was expecting a profit between 3 cents and 5 cents a share, with an average estimate of 4 cents a share, according to a poll of 26 analysts by Reuters Research. Shares of Applied Materials, which brought in a new chief executive at the end of April, have retreated in the past two weeks after a 75 percent run-up to as high as $19.84 from a February low of $11.25. The shares closed at $18.45 on the Nasdaq and were down to $18.34 in after-hours trading. Applied Materials' quarterly revenue peaked almost three years ago during the ballooning expectations for computer and electronics demand, when chipmakers bought $2.92 billion of the company's products and services in a single quarter. The traditional boom-and-bust cycle of chip-production demand appears to have gotten stuck in the "bust" phase, leading companies such as Applied to trim millions of dollars of expenses. Applied Materials is expected to post its third consecutive year of shrinking revenue and is finishing up 3,750 job cuts announced this fiscal year, which ends in October. Michael Splinter, Applied Materials' CEO, has said the company has been "reset" following a euphoric period of expansion. The global market for microchipmaking equipment has fallen about 60 percent from 2000 levels, and sales of such tools are expected to recover only 4 percent this year to $20.5 billion.