It's hard for me to get excited about the market when I see headlines bombarded with layoff announcements. Yesterday Applied Materials (AMAT) beat the street by a wide margin. They reported an EPS of $0.10 per share compared with an estimate of $0.03. That is 233% upside surprise! Amazing how the consensus can be so wrong on the largest chip equipment suppliers. What's more important is that Applied plan to cut up to 1,500 jobs worldwide. Other tech companies are planning to reduce head counts as well. Here is the list of companies.
- Adobe - 680 jobs
- Electronic Arts - 1,500 jobs
- Sprint - up to 2,500 jobs
- Microsoft - 800 jobs
- RealNetworks - 70 jobs
- AOL - 100 jobs
- Sun Microsystems - 3,000 jobs
- Blue Coat - 150 jobs
- Lexmark - 825 jobs
- Nokia Siemens - potentially north of of 5,000 jobs
- Applied Materials - up to 1,500 jobs
I assume that these are considerably high paying positions. We'll have to see if the market can show any sign of weakness despite such bad news to the public.
That aside, the market continued to be strong BUT the upward trend is still in question. Dow stayed above the previous peak while the Transport have yet to confirm that move. I won't predict what the market will do and will wait and see. If the confirmation comes, I will buy quality company at or near its low.
Art
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