Applied Materials Q1 Profit Rises - Update

(RTTNews) - Applied Materials Inc. (AMAT) Wednesday reported a significant increase in profit for the first quarter, as revenues surged reflecting higher spending by contract chip makers. The semiconductor equipment maker's earnings for the quarter beat analysts' estimates by a penny, while revenues also trumped expectations.

Santa Clara, California-based Applied Materials' first-quarter profit surged to $253 million or $0.21 per share from $34 million or $0.03 per share last year.

Adjusted earnings were $279 million or $0.23 per share for the quarter. On average, 18 analysts polled by Thomson Reuters expected a profit of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Applied Materials' first-quarter revenues surged to $2.19 billion from $1.57 billion a year ago. Analysts expected revenue of $2.13 billion for the quarter.

Chief Executive Gary Dickerson said, "This performance reflects healthy investment by our semiconductor and display customers and major technology trends that are playing to our strengths in precision materials engineering."

Applied Materials is one of the largest equipment supplier to the chip making industry. Its customers includes big chip making companies like Intel Corp. (INTC), Samsung Electronics Co.

Segment-wise, Silicon Systems Group sales increased to $1.48 billion from $969 million last year, and Applied Global Services sales rose to $507 million from $471 million. Display sales improved to $159 million from $87 million last year.

Looking forward to the second quarter, Applied Materials expects adjusted earnings of $0.25 to $0.29 per share and sales growth of 3 percent to 10 percent sequentially, indicating revenues of $2.26 billion to $2.41 billion. Analysts now see second-quarter earnings of $0.27 per share on sales of $2.32 billion.

AMAT closed Wednesday's trading at $17.91, up $0.13 or 0.73%, on the Nasdaq. The stock further gained $0.19 or 1.06%, in after-hours trade.