Applied Materials Q2 Profit Surges, Outlook Strong - Update

(RTTNews) - Applied Materials Inc. (AMAT) Thursday reported an increase in profit for the second quarter, driven largely by a 4 percent growth in revenues. The semiconductor equipment maker's earnings for the quarter were in line with Wall Street estimates, while revenues trumped expectations.

Moving ahead, the company projected a strong outlook for the third quarter.

Santa Clara, California-based Applied Materials' second-quarter profit rose to $364 million or $0.29 per share from $262 million or $0.21 per share last year.

Adjusted earnings for the quarter rose to $362 million or $0.29 per share from $348 million or $0.28 per share last year. On average, 20 analysts polled by Thomson Reuters expected earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude special items.

Applied Materials' second-quarter revenues rose to $2.44 billion from $2.35 billion last year. Analysts had a consensus revenue estimate of $2.40 billion for the quarter.

Second-quarter orders were $2.52 billion, up 11 percent sequentially and down 4 percent year over year.

Applied Materials' products are used by chip companies to make smartphone and memory chips, and investors consider its orders and sales as an important metric to gauge the demand pattern of the electronics market.

Segment-wise, Silicon Systems Group sales jumped 8 percent to $1.56 billion, while Applied Global Services sales increased 11 percent to $646 million. Display sales declined 41 percent to $163 million, while Energy and Environmental Solutions sales increased by 33 percent $73 million.

"Applied posted our highest quarterly revenue in the past three years and earnings near the top of our guidance range," said CEO Gary Dickerson.

For the third quarter, the company expects adjusted earnings of $0.31 to $0.35 per share and sales to grow 2 percent to 6 percent sequentially, indicating sales of $2.49 billion to $2.59 billion. Analysts currently expect earnings of $0.33 per share on revenues of $2.52 billion.

Applied Materials had last month called off its merger deal with Tokyo Electron Ltd., due to anti-trust issues, after agreeing to acquire its Japanese peer for about $9.4 billion in September 2013.

AMAT closed Thursday's trading at $19.86, down $0.07 or 0.35%, on the Nasdaq. The stock further gained $0.63 or 3.17% in the after-hours trade.