AMAT Sees FY Q3 Orders Dn 15%-25% Sequentially; Revs Down 10%-18%; EPS 10-14c Vs. Street At 25c
Applied Materials (AMAT) CFO George Davis told investors on a post-earnings conference call this afternoon that the company expects orders in the fiscal third quarter ending July to be down 15% to 25%, driven by “very weak” demand for silicon equipment, and lower display orders. The company sees revenues down 10%-18% sequentially, with a “strong pullback” by DRAM and flash memory customers. AMAT sees EPS in the quarter of 10-14 cents a share, below the Street consensus of 25 cents.
Amat sucks!
So does your mom, Dave.
wow - let’s review that last sentence, shall we?
To wit
>>> AMAT sees EPS in the quarter of 10-14 cents a share, below the Street consensus of 25 cents.
>>>
That’s a humongous lowering of EPS estimates by any standards, IMHO. And what happens? AMAT stock is only down very very marginally today. So what gives here? Are all the funds daring one another to be the first to hit the Exit doors? Given this level of slowing in their business, how could the Street justify applying a 30x (or greater?) EPS multiple on AMAT? This valuation is far too rich for my blood - I think there’s an undue amount of optimism baked into the stock price and is, IMHO, highly unwarranted. A multiple compression is not only likely; it will help restore some degree of rationale into the price.
– Jim
Tech Trader Daily is a blog on technology investing written from Palo Alto, California by long-time Barron's West Coast Editor Eric J. Savitz. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields.
