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AMAT reported 8/14, EPS & Revnue were a little above expectations, bookings and backlog were down. Market reaction has been negative, the stock at 20.55 is off .69 or 3.24% as I write.
I listened to a recording of their conference call, available at their website. AMAT has multiple segements and many of the analysts seemed to be trying to pick up a little information to improve what would be relatively complex models. I don't attempt projections at that level of detail unless the stock only has one or two analysts and I might be able to get something others would not have.
What I heard was a belief on management's part that they will be able to mainatin or slightly improve current margins, which are generous. Over the next year or two, demand for memory should improve due to the amounts required for mobile storage and the amount required to accommodate VISTA when that achieves corporate acceptance. Foundries have been achieving higher utilization rates before resorting to capex, and the move to 65 nanometer has been slower than anticipated: both trends are expected ameliorate over time. They have held or or made small incremental gains in market share where they are dominant and gained share in other areas.
LCD TVs are doing well in the marketplace, but orders for the equipment have not kept pace. Flat panel displays is a growing market as far as I can see.
Cash flow has been good and was used (in part) to buy back shares at an average price of 19.99, a bargain in my opinion and as such it improves the value of the remaining shares. R&D expenditures continue: I think it is a strength of the company that they have the ability to fund as much R&D as it takes to achieve their product enhancement/development objectives.
The solar is ahead of target - they raised their goal from 400 to 600 million in orders for the year. There are a multitude of technologies contending for dominance in this market, AMAT is determined to use their substantial resources in order to be a major factor in this field, and they are not placing all their bets on any one technology at this point. Their point, which I think is well-taken, is that this business is dependent on reducing the cost per watt of solar generated power, and they directing their efforts in that direction.
After putting all this through the blender, I feel AMAT's resutlts are along the lines of what I was looking for. The solar will take years to develop but is ahead of target. My position is less than full size and with a favorable impression of their progress to date, I can add to it. Because the stock is going down right now and the market is volatile, I will defer action in the hope of getting a better price.
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