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To: John Pitera who wrote (37247)	4/29/1999 11:17:00 AM
From: wlheatmoon	Read Replies (1) \| Respond to of 86076

where's tippet...the semi's may be getting their overdue kick in the groin...... 09:15 ET**** KULICKE & SOFFA (KLIC) 28 1/8. Sure, orders are up, but the numbers remain terrible. Before the open Thursday, semiconductor equipment maker Kulicke & Soffa (KLIC) reported a first quarter operating loss of $0.32 per share. That was nine cents worse than expectations, and a lot worse than the year-ago profit of $0.39 per share. Revenue plunged 38.7% from the year-ago first quarter. Yet, the stock is up from 10 in October. The reason is that the market sees better times ahead for the semiconductor and equipment maker industries, even though personal computer sales are slowing down. To some extent, the market is certainly correct. Business can't get much worse. But the question is whether business will improve enough to justify the recent stock price increases in KLIC and related stocks. Briefing.com has serious doubts. KLIC did say that bookings were $98 million this quarter, twice last quarter. But in the year-ago quarter revenue was $120 million. KLIC won't get back to that level for some time. KLIC also said that it would return to profitability later this year. Good news, but how much profit? The market is clearly expecting a decent level. The problem with this stock and other chip equipment makers is that the good news is largely in the stock price. Everyone knows business should improve, even though it hasn't yet. Risks, however, seem to be ignored. If anything goes wrong, and business doesn't rebound sharply, KLIC could be facing a string of quarterly losses. In that case, the stock could head back to last summer's levels. The risk/reward ratio on this stock is thus problematic. The current numbers are very poor. If a strong rebound occurs, that may already be in the price. If the financials improve moderately, the stock could struggle. If they barely improve at all, the stock price is at risk. KLIC has high expectations for the future build in, and they are a long way from achieving them. 08:45 ET**** AMAZON.COM (AMZN) 192 7/8. Serious "selling on the news." The numbers aren't that bad, but the stock is indicated to open as much as 20 points lower. After the close Wednesday, Amazon.com (AMZN) reported a first quarter pro-forma loss of $0.23 per share. That was six cents better than the $0.29 per share loss that analysts were expecting. AMZN also scores a few points with Briefing.com for clearly noting that operating losses on a generally accepted accounting principle basis (GAAP) was $0.39 per share, but apparently the market has fully decided to ignore that more appropriate number and to meekly accept the pro-forma numbers that exclude amortization costs. That issue aside, AMZN also reported a better than expected revenue number of $293.6 million. Talk had been for a number between $250 to $270 million. Revenue was up 236% from the year-ago level. It represents decent growth from the fourth quarter level of $252.9 million, as retailers typically experience a slowdown after the holidays. It does, however, continue a slowing trend in the quarterly year-over-year revenue growth figures of 283% in the fourth quarter of 1998, 306% in the third quarter, and 316% in the second quarter. So, why is the stock down? For the same reason it has been up lately. Momentum. Today, there are more sellers than buyers. It is not uncommon for Internet stocks to run up ahead of earnings reports, and then to sell off. AMZN may have been caught in that pattern. There is nothing specific in the report that is causing concern, nor any particular surprises; it is just selling on the news to take some profits. AMZN does have a very high valuation, and background perceptions of a slowdown in revenue growth could be a factor. As anyone knows that trades this stock, it can move 20 points quickly in either direction. It looks to start downward today, and from here, who knows?