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

To: Donald Wennerstrom who wrote (15261)	5/19/2004 5:04:38 PM
From: Donald Wennerstrom	Read Replies (1) \| Respond to of 95617

An input from the SJMN <<Santa Clara, Calif.-Based Applied Materials Posts Second-Quarter SalesSurge May 19, 2004 (San Jose Mercury News - Knight Ridder/Tribune Business News via COMTEX) -- Materials, Silicon Valley's bellwether manufacturer of equipment to make computer chips, announced Tuesday its sales surged again in its most recent quarter, putting it on track to post its first year-over-year gain in four years. Sales for the Santa Clara company rose to $2.02 billion -- an 82 percent jump compared with a year ago -- in the fiscal quarter ended May 2. The growth was boosted by strong sales in Asia and an appetite for consumer electronics from computers to cell phones to flat-panel TVs. It posted second-quarter net income of $373.3 million, up from a net loss of $62 million a year ago. The quarterly results of the world's largest chip-equipment maker beat analysts' expectations and signaled more growth for the semiconductor industry, which has been rebounding the past several quarters. Analysts saw it as a good sign overall. "This bodes well for Silicon Valley. Things are clearly on the rebound," said Bill Ong, senior analyst at American Technology Research in San Francisco. "We're much better off today than a year ago. There's no doubt the direction is upward and to the right." Applied logged net income of 22 cents a share, compared with a loss of 4 cents a share a year ago. That beat analysts' forecast of 19 cents and Applied's own February outlook of 17 to 19 cents a share. The company also painted an upbeat forecast into 2005, estimating that revenue will grow 5 percent this quarter. Strong growth in Asia helped the tech giant back to its feet. Applied was one of the first semiconductor companies to enter China more than two decades ago. Its strategy has paid off -- sales in China will reach $1 billion this year, as Chinese companies shore up their own chip-building factories. China and Southeast Asia brought in 22 percent of new orders in the second quarter, while Taiwan accounted for 21 percent and Japan 17 percent. North America accounted for 19 percent, a gain from last quarter. "Under-investment in the past three years has created pent-up demand," said Chief Financial Officer Joseph Bronson. Consumer demand for electronic gadgets is also improving Applied's bottom line. Most notably, flat-panel displays used in everything from televisions to cell phones to computer monitors are expected to grow more than 120 percent in 2004. Applied also sells equipment that makes flat-panel displays. "For us, it's a double positive," said Chief Executive Mike Splinter. "We're booking well into 2005." Overall, Applied executives predicted that sales growth for the semiconductor industry will grow as much as 40 percent in 2004. On a conference call, Splinter and Bronson skirted analysts' questions about short-term growth possibly flattening out toward the end of the year. Both commented that companies have been more cautious than usual. Applied plans to keep hiring flat, said a spokesman. Applied Materials shares closed Tuesday at $18.85, up 40 cents on the Nasdaq Stock Market.>>