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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (12498)	11/12/2003 5:47:32 PM
From: Return to Sender	Respond to of 95456

Applied Materials Says the Upturn Has Arrived By K.C. Swanson Staff Reporter 11/12/2003 05:15 PM EST thestreet.com Updated from 4:22 p.m. EST Lead chip-equipment maker Applied Materials (AMAT:Nasdaq - commentary - research) surprised even the optimists late Wednesday when it forecast outsize 20% order growth in its upcoming January quarter. As a bonus, the company also beat Wall Street expectations on the top and bottom line in its October quarter, though its profit suffered from restructuring costs. The robust order outlook sent the stock up 71 cents, or 2.8%, to $26.15 after the bell. In regular trading, Applied closed up 54 cents, or 2.2%, to $25.44. Applied reported net sales of $1.22 billion, down 16% from last year's levels and above the consensus estimate for $1.14 billion. Net income totaled $15 million, or a penny a share according to generally accepted accounting principles, below last year's profit of $147 million. Net income took a hit from a pretax charge of $114 million to consolidate facilities and employee-related restructuring costs. Excluding the charge, AMAT would have posted a profit of 6 cents a share, a penny above expectations. The company said new orders rose 21% from the prior quarter. That latest results "indicate what we believe is a turning point for the equipment industry," said CEO Mike Splinter. "Fourth quarter revenues were up, earnings were up and we expect the momentum to carry through the first quarter." He said he was seeing "clear signs of an upturn in worldwide fabrication equipment spending." Among positive signs, he noted semiconductor companies are now using about 90% of factory capacity to keep up with demand -- a trend "requiring quick action to support capacity increases," he said. Japanese chipmakers, foundries and DRAM makers were among the source of strength in the quarter, with DRAM accounting for about 26% of orders, down from 47% last quarter. More than 60% of Applied's orders were for 300 mm equipment. For the January quarter, Applied forecast revenue growth of 5% to 8%, implying sales of between $1.28 billion and $1.32 billion. That revenue range is above the Wall Street consensus estimate for $1.24 billion. Pro forma EPS should range from 6 cents to 8 cents, compared with Wall Street's 8-cent outlook. Applied said it plans to wrap up its four-quarter restructuring program with a charge of $75 million to $125 million to consolidate facilities. Order growth of 20% is expected to come from large companies that design and make their own chips, foundries and DRAM makers. Applied also reported results for its fiscal year ended in October. In fiscal 2003, sales declined 12% to $4.48 billion, and the company posted a net loss of $149 million, or 9 cents a share, down from its 2002 profit of $269 million.