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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: D.J.Smyth who wrote (6676)	10/26/1997 5:48:00 PM
From: Gerald L. Kerr	Respond to of 25960

From Fortune Magazine A popularly written commentary on the Intel/HP Merced chip. *********************** Killer Chip Intel and Hewlett-Packard call their Merced microprocessor the next big step in computing. It's also a way to take all their customers and cement their loyalty--permanently. pathfinder.com@@ULpIdAUA5CnwIDWx/fortune/1997/971110/int.html *********************** 10+ million transistors on a chip approximately 1 in. square. Hmm...I wonder what size line width might make that possible? Gerry

To: D.J.Smyth who wrote (6676)	10/26/1997 6:33:00 PM
From: sepku	Respond to of 25960

>>>Style, Bret H. had estimated CYMI to make $1.25 prior to his downgrade post split. After downgrade he estimated $1.04 based on sale of approximately 400 lasers for 1998. If we take Angus at this word with 40% expected growth rate, and we have over a $65 million dollar quarter for the 4th quarter we'll arrive at approximately $220 million for revenue for 1997. With 40% growth, we come to nearly $310 million for 1998, with laser sales approaching 600 for 1998. That would yield EPS for 1998 of approximately $1.50 to $1.60 given improving gross margins due to increasing tool sales in the latter half of 1998 and lowering tax rate from current 38% to around 32% (based on accounting model). So, CYMI is trading at 2.6 times 1998 revenue, and 18X earnings using these numbers. Will post more later.<<< ------------------------------------------------------------------------------- Darrell, I think you are nearest to accuracy here. Your numbers seem very reasonable...and I think your more conservative perspective is the more prudent to consider. A couple people pointed out that my eps estimates must be pre-split. But I don't see how, considering Cymer is already on track to earn between .95 to $1 for 1997 fiscal year. Therefore, estimates in the neighborhood of 1.04 to 1.10 seems way off mark when that would account only for 10% growth at tops. I'm definately going to have to investigate this further...I beginning to wonder if some people are confusing '97 estimates with '98! (I got my info from various articles and Zacks or First Call, I believe -- will confirm) In regards to the the folks running numbers on future revenue by accounting for projected laser sales...the CC estimated 1998 demand to be around 700 lasers. Assuming CYMI holds 90% of the market, that's 630 lasers. But I also believe we are forgetting that CYMI stands to profit not only from the lasers themselves, but from spare parts and maintenance, as well. We also know that 2 of 3Q's lasers were sold for non-litho use...who knows what further market potential lies in these other applications for Cymer lasers. Darrell pointed out that lowering tax rates due to accounting could boost margins. Combine that with lowered ramp-up of capacity expenditures, as well as improved efficiency in production as Cymer becomes more experienced in mass-production, plus even economies of scale reducing production costs. This all may boost Cymer's margins significantly, and increase eps. And lastly, let's not forget that the market will afford Cymer a premium for it's monopolistic position, growth, and bright potential. Just look at what CYMI shares were bidding only 2 months ago, plus the p/e it was carrying! Once we return to favor, you can bet that will happen again. Cymer's share price has behaved in this manner a couple times in the past already. Style Pts.