CONFERENCE CALLS
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FOOL PLATE SPECIAL
Applied Materials
Could today's post-earnings conference call throw shares of APPLIED MATERIALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: AMAT)") else Response.Write("(NASDAQ: AMAT)") end if %> into a further slump? Judging by the letdowns that followed the last two quarterly conference calls and the fact that visibility for the multi-billion-dollar behemoth has not gotten all that much better over the past quarter, the likelihood appears strong. Look for investors to pay special attention to the company's internal book-to-bill number, carefully watching whether or not the massive supplier of front-end semiconductor equipment is burning backlog.
In the January and April quarters, Applied reduced its near-term expectations for the company while articulating a long-term view that would bring $10 a share in profits in the year 2000. While the long-term picture would seem to indicate hundreds of new semiconductor wafer fabrication plants will need to be constructed before the turn of the millennium, the possibility of a protracted downturn and quarterly losses before we get there is causing institutions and individuals alike to run for cover from the shares.
Applied is one of the few companies in the semiconductor capital equipment universe over the $1 billion-capitalization mark, an honor Applied shares only with KLA Instruments (metrology), Teradyne (test equipment) and ASM Lithography -- a clear indication that the current valuation is out of whack, in this Fool's humble opinion. As a result, it is one of the few companies that institutions can efficiently purchase and liquidate without completely moving the market themselves. The side effect of this is that when Applied becomes universally disliked by institutions, it gets absolutely crushed as smaller contrarian buyers are not substantial enough to prop it up.
Estimates today call for $0.92 EPS on $1.1 billion in revenues -- essentially the numbers the company spelled out on July 15th when it warned it would not make its previously-stated third quarter estimates. Have push-outs accelerated since then? Have the delays in fab building hit Applied harder than some of its smaller, more nimble peers? These are the kinds of questions Fools will be looking to hear the answers to tonight. You can listen to the replay (not the live call) at 8:30 PM EDT by calling 1-800-642-1782 and entering in 951947 when prompted for the access code.
HADCO CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HDCO)") else Response.Write("(NASDAQ: HDCO)") end if %> benefited from slightly-better-than-expected earnings this morning, jumping up $3 3/8 to $22 3/4. The company's $0.72 EPS quarter apparently made some value investors realize that even if profits do slacken over the next year or so, the stock is still really cheap.
Farm equipment manufacturer DEERE & CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DE)") else Response.Write("(NYSE: DE)") end if %> rose $2 to $38 1/2 this morning after besting Zacks estimates of $0.78 EPS by a penny. The company grew profits by 14% while revenues were up 9%. Could this performance be behind an upgrade of CASE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CSE)") else Response.Write("(NYSE: CSE)") end if %> this morning? Case is up $1 1/8 to $45 1/2.
PACIFIC GATEWAY EXCHANGE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PGEX)") else Response.Write("(NASDAQ: PGEX)") end if %> rose $1 3/4 to $16 3/4 after PaineWebber initiated coverage of the company with a "strong buy" rating. PaineWebber was the international long distance provider's lead underwriter in its initial public offering (IPO) a month ago.
News from ARGYLE TELEVISION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ARGL)") else Response.Write("(NASDAQ: ARGL)") end if %> that it is "exploring alternatives" and is considering sale of the company is boosting shares $4 1/2 to $27 1/2. The company's seven television stations could fetch a pretty penny in the post-telecommunications reform universe.
QIAGEN NV <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: QGENF)") else Response.Write("(NASDAQ: QGENF)") end if %> jumped $1 3/4 to $22 3/4 this morning after a recommendation from Alex. Brown & Sons. The separator of nucleic acids has a defensible market position that will support strong growth in sales and earnings, according to the West Coast firm.
Text-to-speech software producer LERNOUT & HAUSPIE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: LHSPF)") else Response.Write("(NASDAQ: LHSPF)") end if %> has been having a number of good days lately, rising $1 1/4 to $23 this morning after posting earnings of $0.02 EPS, well ahead of the $0.03 EPS loss that analysts were forecasting.
IMNET SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IMNT)") else Response.Write("(NASDAQ: IMNT)") end if %> advanced $7/8 to $26 1/2 after nearly doubling consensus estimates in its most recent quarter. The company reported $0.35 EPS, 85% ahead of the $0.19 EPS analysts were looking for. The company develops systems to manage healthcare information and other documents.
News that MICROSOFT'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MSFT)") else Response.Write("(NASDAQ: MSFT)") end if %> software has built in a YAHOO! <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: YHOO)") else Response.Write("(NASDAQ: YHOO)") end if %> autosearch feature is pushing shares of the Internet-based search engine up $3 to $20 1/4 this morning.
ESCALADE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ESCA)") else Response.Write("(NASDAQ: ESCA)") end if %> escalated $2 1/8 to $8 3/8 this morning after the company announced that it was beginning a one-million-share Dutch auction, priced somewhere between $6 and $10 a share. The company manufactures sporting goods, office and graphics arts products.
Research that indicates GENZYME'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: GENZ)") else Response.Write("(NASDAQ: GENZ)") end if %> seprafilm reduces scar tissue and adhesions following abdominal surgery is behind the Food & Drug Administration's decision to grant approval for Genzyme to market the product for this purpose. Shares of Genzyme were up $2 3/4 to $26 as a result.
COVENTRY CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CVTY)") else Response.Write("(NASDAQ: CVTY)") end if %> joined the list of healthcare maintenance organizations posting worse-than-expected earnings when the company reported this morning that it actually managed to lose money in the last quarter. Shares were down $7/8 to $13.
Morgan Stanley was taking money off the table in the gaming stocks this morning. HARRAH'S ENTERTAINMENT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HET)") else Response.Write("(NYSE: HET)") end if %> dropped $1 1/8 to $21 after being initiated with a "neutral" rating, CIRCUS CIRCUS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CIR)") else Response.Write("(NYSE: CIR)") end if %> was munched for $1 3/8 to $30 1/2 after being downgraded to "outperform," and MIRAGE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MIR)") else Response.Write("(NYSE: MIR)") end if %> lost $1 3/8 to $21 5/8 in sympathy.
RECOTON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: RCOT)") else Response.Write("(NASDAQ: RCOT)") end if %> slumped $1 to $15 3/8 after reporting a negative surprise, posting $0.05 EPS compared to consensus expectations of $0.21 EPS. The manufacturer of electronics components made $0.22 EPS last year.
Warnings from MAXIM INTEGRATED PRODUCTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MXIM)") else Response.Write("(NASDAQ: MXIM)") end if %> that unless customers cut inventories or order more they could see declining revenues is behind the $2 15/16 to $29 7/16 drop in the semiconductor manufacturer this morning.
CITY NATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CYN)") else Response.Write("(NYSE: CYN)") end if %> got whacked again after Schroder Wertheim cut shares of the Southern California-based commercial bank to "hold" a day after Keefe Bruyette did the same. The bank was down $1 1/8 to $16 3/4.
A much-wider-than-expected loss is why shares of PROTECTION ONE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ALRM)") else Response.Write("(NASDAQ: ALRM)") end if %> fell $1 1/4 to $13 1/2 this morning. The company reported a loss of $0.31 EPS compared to First Call estimates of $0.19 EPS, thus alarming investors.
AAMES FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AAM)") else Response.Write("(NYSE: AAM)") end if %> dropped $2 1/2 to $45 after yesterday's announcement that the consumer loan firm would buy One Stop Mortgage, causing it to take a one-time charge for the purchase in its fiscal first quarter.
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Randy Befumo (MF Templar), a Fool
Selena Maranjian (MF Selena) another Fool
Prem Kumar (MF Prem) another
Fool