A further round of layoffs amy be in the offing at Applied Materials Inc. (Nasdaq: AMAT), which has important activity in Israel. ''We see potential for restructuring announcement," at Applied Materials Inc. (Nasdaq: AMAT), says Barclays Capital analyst C.J. Muse in a new report. The company is due to publish its quarterly financials today.
Muse adds, "We think involves headcount reductions as well as additional cost cutting efforts.'' He raised his target price for the share in the belief that the cutbacks will be made and that they will boost Applied Materials' productivity in the coming quarters. Applied Materials is traded at a market cap of $18 billion.
Muse expects Applied Materials to make across-the-board cuts, including in the company's solar business and its service sector. ''Considering the focus of the cuts would likely be across the entire company including solar, we do think this does beg question of the outlook for, in particular, Applied's solar business where we continue to have concerns regarding Applied's thin film technology,'' he says.
Muse adds that Applied Materials will probably freeze in investment and make more cuts in its product lines, testing and quality control products for silicon wafers (such as mask inspection, UVision, and SEM). These are the core businesses of Applied Material Israel Ltd.
Applied Materials has already undergone one restructuring in the past two years. The company last announced layoffs in December 2008, which included 1,800 layoffs, including 200 employees in Israel, over the coming year. The company also fired employees in early 2008, which hit the Israeli operations hard. Applied Materials currently has 14,000 employees worldwide, including 1,000 in Israel.
Applied Materials Israel said in response, "The company does not respond to rumors."
Published by Globes [online], Israel business news - www.globes-online.com - on August 11, 2009
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