John Pitzer Quotations

Business conditions continue to be robust. The company expressed high confidence in its third-quarter guidance of greater than $3 billion in bookings, $2.6 to $2.7 million in revenue and EPS of 64 to 68 cents. We believe guidance is conservative and estimate bookings of $3.3 billion with EPS of 70 cents, versus the Street consensus of 68 cents a share.

We become more worried about growth in the April quarter. We have perhaps a more bearish view than most on the length of the current inventory correction. We are lowering our 2001 capital growth estimate from 10-15 percent to 0-5 percent.

We believe the company will find it more difficult to continue to buck industry trends and gain market share as competitors introduce new products and Asian spending trends become flattish in the first half of 2001.

Unfortunately, the current demand trough seems to have deepened considerably. Back to school sales have been modest, at best, and demand continues to weaken internationally.