Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Proud_Infidel who wrote (28202)	2/16/1999 1:01:00 AM
From: Jeffrey D	Respond to of 70976

.....and this from Japan just to remind us not to take anything for granted as we approach earnings announcement. Jeff << DEC ORDERS FOR JAPANESE CHIP-MAKING EQUIPMENT FALL 40% -------------------------------------------------------------------------------- Story Filed: Monday, February 15, 1999 11:25 PM EST TOKYO, Feb 16, 1999 (Asia Pulse via COMTEX) -- Orders for Japanese-made semiconductor-manufacturing equipment, including exports, came to 49.76 billion yen in December 1998, for a year-on-year drop of 40% and the 13th straight month of declines, according to the Semiconductor Equipment Association of Japan. But the decline's size narrowed by 19.7 percentage points from November 1998, indicating the market may be emerging from its worst phase. Orders for mask-and-reticle equipment increased by about 480% from December 1997, but orders for wafer-making equipment fell 85.7%. The value of orders from the Japanese market, including imports, fell 35.9%, for the 12th straight month of year-on-year declines. But the size of the decline likewise narrowed from the previous month, dropping 19.9 points. >>

To: Proud_Infidel who wrote (28202)	2/16/1999 9:55:00 AM
From: Henry Eichorszt	Read Replies (1) \| Respond to of 70976

FROM THESTREET-Investors Want Applied Materials to Deliver on Orders By Marcy Burstiner Staff Reporter 2/16/99 9:00 AM ET SAN FRANCISCO -- The pressure is on for Applied Materials (AMAT:Nasdaq) CEO James Morgan. The bellwether semiconductor equipment company is scheduled to report first-quarter earnings Tuesday after the market closes. Investors who have run the stock up 183% since Oct. 8 -- a performance that's 156 percentage points better than the S&P 500 -- now demand some bang for their bucks. Expectations are high that Applied Materials will see an explosion in the value of new equipment orders -- the pulse rate of the industry. Three months ago, Morgan told investors that the company would likely produce some $675 million in new orders in the first quarter, but the numbers floated out on the Street are between $800 million and $950 million. That means that Morgan has to better his own guidance by at least 19%. "I'm a little concerned that expectations are more than the company's ability to deliver," says William Keithler, a portfolio manager with Invesco Strategic Technology Fund, which holds about $400,000 worth of Applied Materials stock. Still, he says, company rivals Teradyne (TER :NYSE), KLA-Tencor (KLAC:Nasdaq) and Lam Research (LRCX:Nasdaq) recently beat the Street's estimates, so it's likely that Applied Materials, as the industry leader, will also surprise. If it doesn't, the stock will drop, Keithler reasons, giving him the opportunity to buy. "We would take advantage of that," he says. Investors are more patient on earnings growth. First Call reports a 24-analyst consensus for a profit of 6 cents a share, which would be 1 cent less than Applied Materials delivered in the previous quarter. Most analysts now expect the final results for the first quarter to be about 8 cents, but that's down from a profit of 52 cents a share for the same period last year. Regardless, expectations of $850 million in new orders and EPS of 8 cents are already built into the stock price, says Gerry Fleming, an equipment analyst with Van Kasper & Co., who has a hold rating on the stock. "It will sell off on the numbers," he predicts. A sharp industry rebound in the second half of the year is already discounted in the stock price, and he expects to see a plateau that will last for the next few months. (Van Kasper does not have an underwriting relationship with Applied Materials.) Brett Hodess, who covers the company for NationsBanc Montgomery, says that the total value of new orders isn't as important as net orders, which would also take into account orders canceled within the quarter. Of the $684 million in new orders received last quarter, he says, $90 million were subsequently canceled. This time Hodess expects net orders to be above $700 million and EPS of 8 cents. Most of that is built into the current stock price. (Montgomery does not have an underwriting relationship with Applied.) Applied Materials shares are trading near an all-time high, with a price-to-earnings multiple of more than 100 at Friday's close of 66 7/8. Given that valuation, what could drive the stock higher? The shifting of chip production from 0.25 micron technology to 0.18 micron, says Salomon Smith Barney analyst Melind Bedekar. The shift is forcing chip companies such as Micron (MU:NYSE) and Intel (INTC:Nasdaq) to buy new equipment, even if they aren't building new manufacturing plants. And companies like Applied, with a diverse range of new products to offer, benefit most from this technology. And that, Bedekar says, is not quite built into the stock price. He has a buy rating on Applied Materials with a 12-month price target of 72, making him one of the most bullish analysts on the Street. But investors might have to wait a bit before the next rise, he adds. "The industry has always been a stop-and-go sector," he says. (Salomon Smith Barney does not have an underwriting relationship with Applied.) Concerned about the future of Net stocks? TSC is holding a special summit on Feb. 19 to discuss the Internet sector. Join columnists James J. Cramer and Herb Greenberg, Andy Kessler of Velocity Capital, Nicholas Moore of Jurika & Voyles, CIBC Oppenheimer's Henry Blodget, Internet Fund manager Ryan Jacob and Brian Salerno of Munder Capital. You'll be able to listen to a live broadcast of the event and later read the transcripts -- but first, help us shape the discussion. Visit this page for the details. TOP