Stifel Nicolaus' Patrick Ho, Citi's Tim Arcuri, and Barclays' CJ Muse generally agree that an industrywide order trough is imminent. The problem for AMAT, Ho notes, is that it's a convergence of troughs in not only semis but also solar, as well as FPD, so there's no safe harbor from known semi industry cyclicality. Ho's newly revised 2001 estimates: $10.7B sales and $1.45 EPS, down from $11.1B and $1.55. [Update 8/22: Caris & Co.'s Ben Pang wades into the discussion, noting that the back-to-school season isn't much of a boost this year, either; he thinks AMAT will meet Street expectations for 3Q but probably not 4Q.]
Citi's Tim Arcuri is more bearish, anticipating "very poor guidance" with EPS maybe half what the Street is projecting ($0.17 vs. $0.33), but interestingly, he says overall "not bad enough to have negative preannounced." (He is lowering his AMAT outlook for EPS to $1.21 in 2011 [vs. $1.35] and $1.01 in 2012 [vs. $1.21].) Muse's outlook for AMAT is also bearish: $10.19B in 2011 sales and $1.25 EPS (vs. his "industry consensus" of $10.86B and $1.36), falling to $9.42B and $1.20 in 2012.
AMAT likely won't offer much sector visibility in its call, which Muse expects will be largely "uneventful." Besides clarity in softness in all its key markets, AMAT likely will face some investor blowback about its acquisition of Varian Semi. Equip. Assoc. (VSEA) -- which was all cash and, as it turned out, at the market's midcycle peak. AMAT also has to deal with solar slowness as customers "finally start to curb cell capacity expansion on cell inventory + demand uncertainties," Arcuri reports, specifically citing a "multihundred-million-dollar cancellation" from Chinese customers.
Everyone generally expects an imminent trough -- Muse sees a -20% decline in current-quarter orders (-20% silicon, -40% solar), and another -10% in the next quarter, while Arcuri sees a -15% orders decline (-50% in solar) before any pickup in early 2012 when Samsung should offer more capex. Following a 2H11 trough, "2012 is shaping up to be at/above normalized level," he writes, with WFE orders "rebound[ing] to $30B run-rate again," Arcuri says.