Applied Materials Hurt on Outlook
Applied Materials reported its fourth-quarter and full-year earnings Thursday after the market close.
Applied Materials Inc. (NASDAQ: AMAT) reported its fourth-quarter and full-year earnings Thursday after the market close. For the fourth quarter, the company reported $0.27 in earnings per share (EPS) on $2.26 billion in revenue, against Thomson Reuters consensus estimates of $0.27 in EPS and $2.27 billion in revenue. In the same period of the previous year, it reported $0.19 in EPS and revenue of $1.99 billion.
The company gave guidance for the first quarter of its 2015 fiscal year for net sales in the range of flat to 5% and EPS of $0.25 to $0.29. The consensus estimates for the first quarter are $0.31 in EPS and $2.37 billion in revenue.
Investors should know that Applied Materials is the king of semiconductor capital equipment, as it has a market cap of more than $27 billion.
Net income for the fourth quarter was $338 million, compared to $349 million in the same period of the previous year.
Across its segments Applied Materials reported:
- Silicon Systems Group orders were down 15% to $1.33 billion from decreases in DRAM, flash and foundry, partially offset by an increase in logic and other. Net sales decreased 3% to $1.43 billion, with a backlog composition of 48%.
- Applied Global Services orders grew 35% to $747 million, driven mainly by increases in semiconductor services and spare orders. Net sales were up 4% to $592 million, with a backlog composition of 27%.
- Display orders were down 56% to $130 million, reflecting continued variability in order patterns. Net sales increased 60% to $190 million, with a backlog composition of 20%.
- Energy and Environmental Solutions orders fell to $44 million and net sales fell to $48 million, with a backlog composition of 5%.
The company’s backlog declined 2% sequentially to $2.92 billion and included negative adjustments of $42 million.
Credit Suisse upgraded Applied Materials to Outperform from Neutral less than 24 hours ahead of the earnings report, and it raised its target price to $26 from $22.
Shares of Applied Materials closed Thursday up 0.5% at $22.62. Following the release of the earnings report, the initial response in the post market was negative and shares were down 3% at $21.94. The consensus analyst price target is $24.95, and the 52-week trading range is $16.40 to $23.46.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
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