Applied Materials Beats Estimates As It Delivers Record Revenue

Applied Materials, a chip equipment manufacturer, has reported revenues and profits that are higher than what analysts had been expecting in the company’s second quarter results. The results were also historic for the company.

“Applied Materials delivered the highest quarterly revenue and earnings in our history, and we’ve now set new earnings records for four quarters in a row,” said Applied Materials’ president and chief executive officer, Gary Dickerson.

Beats estimates

In the quarter that ended in April, revenues for Applied Materials increased by 45% compared to a similar quarter last year to reach a figure of $3.55 billion. This yielded earnings per share of 79 cents when some costs were excluded. The actual results were in contrast to what analysts had forecast as they had been expecting revenues of $3.41 billion and earnings per share of 68 cents.

With regards to the specific businesses under Applied Materials, revenues from the semiconductor business unit increased by 51% compared to a similar period a year ago to reach $2.404 billion. Sales in the display business of Applied Materials more than doubled from a year ago and they reach $397 million.

Flash memory chips

In the semiconductor business 33% of the revenues were generated from sales that were made for tools used in making flash memory chips. This was a 25% increase from last quarter but a 42% decline from a similar quarter last year. Sales from the Applied Materials’ ‘foundry’ business comprised about 41% of the total sales having risen from 41% a year earlier.

While Applied Materials generated cash amounting to $898 million from operations, $390 million was returned to shareholders through cash dividends and stock repurchases.

Earnings guidance

With regards to earnings guidance for the third quarter, Applied Materials projects that net sales will come in at between $3.6 billion and $3.75 billion. This translates to a year-over-year increase of about 30%. The diluted earnings per share on a Non-GAAP adjusted basis is projected to come in at between $0.79 and $0.87. This would roughly translate to a year-over-year increase of roughly 66%.

The outlook for the diluted earnings per share on a non-GAAP basis is exclusive of known charges that relate to acquisitions that have been completed of approximately four cents per share but it is not reflective of items that are not known at this time. This could include additional charges relating to acquisitions, tax-related items or other unusual or non-operational items.

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