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16-08-2012, 10:20 PM
UMS’s key customer Applied Materials released its 3Q2012 results yesterday and below is extracts from its CFO’s interview with FORBES
Applied Materials CFO Says Outlook Hit By Macro Issues
Quote: “Applied Materials CFO George Davis said in an interview with FORBES this afternoon that the company’s disappointing outlook for the fourth quarter reflects a sharp slowdown in demand for chip-making gear amid uncertain macro conditions. He also noted …. …….
Davis said the sharp projected revenue drop reflects a number of factors. In the semiconductor equipment business, the company is seeing a greater-than-seasonal decline in demand, hurt by ongoing macro weakness. The company expects sales to chip foundries to be down more than 50% sequentially in the October quarter, with a 35%-40% pullback from memory customers, and a better than 20% drop in demand from logic customers. “All customers are stepping on the brakes as they look at the economic situation,” he says. ………………………………………………
Davis adds that the company expects a rebound in FY Q1, with “a strong year overall” in FY 2013………………….”. Unquote
For full report: http://www.forbes.com/sites/ericsavitz/2...onditions/
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Let’s look at AM’s revenue segment of semi-tools i.e. revenue of Silicon System Group (SSG)
Revenue of SSG (USD million):
FY2009 = 1,960
FY2010 = 5,304
FY2011 = 5,415
1Q2012 = 1,344
2Q2012 = 1,777
3Q2012 = 1,545 (This is 13% lower compared to 2Q, but is 15% higher than 1Q)
New Orders (USD million)
1Q2012 = 1,418
2Q2012 = 1,969
3Q2012 = 1,166 (This is 40.8% lower compared to 2Q, and 17.8% lower compared to 1Q. This is a significant drop in customer demand.)
Therefore revenue for 4Q2012 is expected to be weak, but as long as it comes in at more than 748 million USD, revenue for FY2012 could still surpass that of FY2011 (5,415 million USD), which could be considered not a bad year at all, given the current uncertain macro condition.
Implications for UMS:
Revenue and profit for 2H2012 would be down, and IMO would be lower than that of 1H2011 and 1H2012. Therefore, it would be unrealistic to expect that last year’s dividend payout of 6 cents per share could be repeated this year.
Would 2013 be a strong year overall, as anticipated by Davis? Again, it depends on the macro condition.
Applied Materials CFO Says Outlook Hit By Macro Issues
Quote: “Applied Materials CFO George Davis said in an interview with FORBES this afternoon that the company’s disappointing outlook for the fourth quarter reflects a sharp slowdown in demand for chip-making gear amid uncertain macro conditions. He also noted …. …….
Davis said the sharp projected revenue drop reflects a number of factors. In the semiconductor equipment business, the company is seeing a greater-than-seasonal decline in demand, hurt by ongoing macro weakness. The company expects sales to chip foundries to be down more than 50% sequentially in the October quarter, with a 35%-40% pullback from memory customers, and a better than 20% drop in demand from logic customers. “All customers are stepping on the brakes as they look at the economic situation,” he says. ………………………………………………
Davis adds that the company expects a rebound in FY Q1, with “a strong year overall” in FY 2013………………….”. Unquote
For full report: http://www.forbes.com/sites/ericsavitz/2...onditions/
________________________________________________________________
Let’s look at AM’s revenue segment of semi-tools i.e. revenue of Silicon System Group (SSG)
Revenue of SSG (USD million):
FY2009 = 1,960
FY2010 = 5,304
FY2011 = 5,415
1Q2012 = 1,344
2Q2012 = 1,777
3Q2012 = 1,545 (This is 13% lower compared to 2Q, but is 15% higher than 1Q)
New Orders (USD million)
1Q2012 = 1,418
2Q2012 = 1,969
3Q2012 = 1,166 (This is 40.8% lower compared to 2Q, and 17.8% lower compared to 1Q. This is a significant drop in customer demand.)
Therefore revenue for 4Q2012 is expected to be weak, but as long as it comes in at more than 748 million USD, revenue for FY2012 could still surpass that of FY2011 (5,415 million USD), which could be considered not a bad year at all, given the current uncertain macro condition.
Implications for UMS:
Revenue and profit for 2H2012 would be down, and IMO would be lower than that of 1H2011 and 1H2012. Therefore, it would be unrealistic to expect that last year’s dividend payout of 6 cents per share could be repeated this year.
Would 2013 be a strong year overall, as anticipated by Davis? Again, it depends on the macro condition.
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
