Applied Materials Survives Earnings Without Tokyo Electron

Applied Materials, Inc. (NASDAQ: AMAT) released its fiscal second-quarter financial results on Thursday after the markets closed. The company had $0.29 in earnings per share (EPS) on $2.44 billion in revenue compared to Thomson Reuters consensus estimates of $0.28 in EPS on $2.40 billion in revenue. The first quarter from last year had $0.28 in EPS on $2.35 billion in revenue.

The company gave guidance for the third fiscal quarter of 2015. Applied Materials expects net sales to increase between 2% and 6% from the previous quarter and that EPS would be in the range of $0.31 to $0.35. There are consensus estimates of $0.33 in EPS on $2.52 billion in revenue for the fiscal third quarter.

In terms of its segments Applied Materials reported:

• Silicon Systems Group (SSG) orders were $1.70 billion, up 19%, with increases in foundry, flash and DRAM more than offsetting a decline in logic/other. Net sales increased by 8% to $1.56 billion.
• Applied Global Services orders of $641 million declined 7% primarily due to a seasonal decline in service contract renewals. Net sales of $646 million increased by 11%.
• Display orders of $120 million were up 12% reflecting an increase in TV equipment orders. Net sales declined 41% to $163 million, which was in line with expectations.
• Energy and Environmental Solutions orders remained flat at $50 million, and net sales increased by 33% to $73 million.
• Applied`s backlog remained essentially flat at $2.78 billion and included negative adjustments of $69 million.

Gary Dickerson, President and CEO, commented on its earnings:

Applied posted our highest quarterly revenue in the past three years and earnings near the top of our guidance range. These results demonstrate that Applied is delivering the enabling products and services our customers need as they transition complex new devices into volume production.

Cash and cash equivalents totaled $3.07 billion at the end of the fiscal second quarter compared to $2.93 billion in the fiscal first quarter, and $3.00 billion in the fiscal fourth quarter of 2014.

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Shares of Applied Materials closed Thursday down 0.4% at $19.86. Following the release of the earnings report, shares were up 2% at $20.29 in after-hours trading. The stock has a consensus analyst price target of $24.55 and a 52-week trading range of $18.48 to $25.71.

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