What to Expect From Applied Materials Earnings

Applied Materials Inc. (NASDAQ: AMAT) will report its fiscal second-quarter earnings Thursday after the markets close. Thomson Reuters has consensus estimates of $0.28 in earnings per share (EPS) on revenue of $2.40 billion. In the same quarter of the previous year, the company posted EPS of $0.28 on $2.35 billion in revenue.

This company has long been a powerhouse in chip capital equipment, and it is a top franchise pick for 2015 at Jefferies. It is the global leader in precision materials engineering solutions for the semiconductor, flat panel display and solar photovoltaic industries. Analysts were disappointed when its merger with Tokyo Electron was called off recently.

Applied Materials and Tokyo Electron announced in late April that they have agreed to terminate their merger. In accordance with the agreement, no termination fees will be payable by either party. The merger was originally announced in September 2013.

Basically, this decision came after the U.S. Department of Justice advised the parties that the coordinated remedy proposal submitted to all regulators would not be sufficient to replace the competition lost from the merger. Based on the Justice Department’s position, Applied Materials and Tokyo Electron determined that there is no realistic prospect for the completion of the merger.

At the same time as the announcement of the merger termination, Applied Materials announced a $3 billion share repurchase program that will take place over the next three years.

Applied Materials saw its short interest for the April 30 settlement date decline handily to 48.99 million shares. The previous reading was 77.1 million. The current reading dropped from one of the top five of the highest short interest readings within the past 52 weeks to the lowest reading.

Shares of Applied Materials closed Wednesday up 0.2% at $19.93. 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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