PALO ALTO, Calif. (CNN/Money) - Applied Materials gave a good demonstration Friday of why public companies should stop giving guidance -- it turns out the last guidance Applied gave wasn't very accurate. So it gave new guidance, which I'm sure will be extremely helpful in analyzing its stock price.

To review, the world's largest maker of machines that make semiconductors announced Friday morning that orders for its first fiscal quarter, the one that ended Jan. 26 (go figure), will be about 35 percent below orders for the previous quarter.

The situation already wasn't looking too good. When the company (which cool stock types like to call "Ay-Matt" after its ticker, AMAT) announced fourth-quarter earnings on Nov. 13, it predicted first-quarter orders would be down 20 percent. So in other words, a bad situation has gotten worse.

Applied blames the usual factors for its reduced performance, primarily that customers are cutting back due to "geopolitical uncertainties." Analysts guess that the reduced orders translate into about $250 million less revenues for the quarter than they'd been expecting. The stock took a dive early on Friday and stayed down, finishing a hair below $12, an 8 percent drop.

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One wonders, however, how anyone could have been surprised. That Applied's orders wouldn't have been great has been telegraphed ever since Intel cut its capital spending budget for 2003 a couple weeks ago. The reason Intel is cutting -- as I explained then -- is that it's getting all the equipment it needs at lower prices.

That's why I warned Jan. 15, based on a conversation with my favorite Intel watcher, that the spending disappointment was worse for Applied than it was for Intel. (In fact, until yesterday Intel's (INTC: Research, Estimates) shares were down 11.3 percent since its earnings announcement while Applied's were down 7.7 percent. After Friday's close, Intel's shares are down about 11.7 percent. Applied's are down 22.1 percent.)

And yet, Wall Street, which lives by the guidance companies give them, continues to ask for more. "We believe AMAT will guide orders for April up, potentially significantly, albeit off a lower base," Deutsche Bank analyst Timothy Arcuri wrote to clients Friday.

I think if AMAT would just shut up it might do less damage.

But anyway, the larger question is what does Applied's news mean? In general, it means we're still nowhere close to the all-clear signal that it's okay to invest in tech again.

Susan Crossley, an analyst with Wells Fargo Securities, thinks there still may be as much as $500 million in "questionable orders" in Applied's backlog. That, together with improved efficiency of the machines Applied has been selling (think of those old Maytag commercials), "should result in slow to no growth in equipment sales for years to come."

So here's some advice: If you think there's a tech recovery that deserves to be invested in, let everyone else have the first few points. There'll be plenty of time to get in.

Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.

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