Technology

What to Look for in Applied Materials Earnings

Chris Lange

Published: May 19, 2016 11:35 am

Last Updated: January 13, 2020 7:50 am

Applied Materials Inc. (NASDAQ: AMAT) is scheduled to report its fiscal second-quarter financial results after the markets close on Thursday. The consensus estimates call for $0.32 in earnings per share (EPS) on $2.43 billion in revenue. The same period from last year had $0.29 in EPS on $2.44 billion in revenue.

This is a semiconductor capital equipment leader that has lagged the overall tech market over the past year, but its shares have bounced smartly off lows printed in February and back in December. The stock actually is now finally trading above all the moving averages, and for patient investors it may be a high-quality pick now.

The company is the global leader in precision materials engineering solutions for the semiconductor, flat panel display and solar photovoltaic industries. Applied Material’s technologies help make innovations like smartphones, flat screen TVs and solar panels more affordable and accessible to consumers and businesses around the world.

Despite the rough patch the company has hit, many on Wall Street think that films companies like Applied Materials will benefit from the new Intel and Micron Technology 3D XPoint (which is pronounced 3D cross-point) technology, which is an entirely new class of nonvolatile memory that can help turn immense amounts of data into valuable information in real time.

A few analysts weighed in on Applied Materials prior to the release of the earnings report:

• B. Riley reiterated a Neutral rating with a $19.50 price target.
• Deutsche Bank has a Buy rating with a $24 price target.
• RBC Capital has a Sector Perform rating with a $22 price target.
• DA Davidson has a Neutral rating with a $23 price target.
• BNP Paribas has a Buy rating with a $28 price target.

So far in 2016, Applied Materials has outperformed the market, with the stock up 7%. Over the past 52 weeks, the stock has been relatively flat, with shares up just 1%.

Shares of Applied Materials were trading down o.6% at $19.80 on Thursday, with a consensus analyst price target of $23.25 to $14.25.