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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Howard Feinstein who wrote (13172)	12/12/1997 6:03:00 PM
From: 16yearcycle	Read Replies (2) \| Respond to of 70976

Did BRKS warn after the close? TIA Gene

To: Howard Feinstein who wrote (13172)	12/12/1997 8:31:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Howard, At times like these I like to do some calculations just to reassure myself I am not going to be holding worthless paper a year from now, or a month for that matter. Let's do some math here. AMAT gets approx 45% of it's revs from all of SEA and 8% from Korea in particular. Let's assume Korea pushes out or cancels all orders for FY98. In addition, let's say that the rest of asia pushes out or cancels 50% of their orders for FY98. Europe and North America remained unchanged for this example. Using these VERY BLEAK estimates, revs for FY98 would fall short of expectations by 25.5%, well below the 50% decline in price we have seen over the past two months. In addition, some of this rev. shortfall could be made up with improved margins. My guess(I'm not going out on a limb here) is that Korea will not push out all orders nor will the rest of asia have a 50% push-out rate. At any rate, the selloff we have witnessed was not warranted to the extent it sold off IMO. And I am basing this on numbers I have enumerated, not on how I "feel" about AMAT. In addition, this SEA situation was getting underway when JM & Co. addressed analysts on Nov. 20. IMHO, they assumed some orders would be canceled and factored this into their FY98 eps forecast as best as possible. But for the SEA situation, we were looking at a $2.40-$2.50 year for FY98 IMO. Just my .02 Regards, Brian

To: Howard Feinstein who wrote (13172)	12/13/1997 2:00:00 AM
From: Big Bucks	Respond to of 70976

Howard, Short to mid term (6-12 months) the stock probably isn't going to break any records. These external economic influences will have a negative affect on all semi-manufacturing stocks until things settle down and stabilize. Korea will take 2 years, at least, to recover. Japan has been floundering for several years, and Taiwan is under some pressure also. These countries have no choice but to increase exports to offset currency devaluations against the dollar which will pressure US companies to compete by reducing prices and margins. To me this signals the beginnig of austerity budgeting measures to reign in expenses, typically this means fab delays or postponments and, inevitably, reduced capital equipment purchases except for essential enabling equipment necessary for new products. AMAT backlog will support its profitability for 6 months or so (about $1.7B backlogged orders) even with no new orders, if you consider that they get, say 50% of normal quarterly orders, then they will still make about $3 to $3.5 billion this fiscal year. Not bad in a down market. That is assuming that things don't get terribly worse. Things should take off again in '99 as markets and currencies stabilize and new technologies require better manufacturing capability. AMAT is a very smartly run company and the management will take whatever measures are necessary to try to maintain profitability, including personnel layoffs and management pay cuts if required. They have done this in every prior "downturn" in the business cycle over the last 15+ years. The key is patience, and continuing to invest as much as practical while stock prices are this low. When the industry turns around and new fabs and technologies are needed this stock will easily double, or even quadruple, in very short order as funds and investors take advantage of the stock/industry growth. I expect that the funds will come back in sometime in mid-late January and the stock price will again be in the low to mid 30's. Just my opinion, Regards, BB