Applied Materials Profit In Line

(RTTNews) - Semiconductor equipment maker Applied Materials Inc (AMAT), Thursday reported an increase in fourth-quarter profit, driven mainly by a 14 percent climb in sales. Earnings coming in line with Wall Street estimates, while sales fell shy of expectations.

The company provided some weak earnings outlook for the first quarter, sending its shares down 3.6 percent in after-hours trade on the Nasdaq.

Applied Materials, based in Santa Clara, California, posted quarterly net income of $290 million or $0.23 per share, compared with $183 million or $0.15 per share last year.

Excluding items, adjusted earnings for the quarter were $0.27 per share, compared with $0.19 per share a year ago. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter rose to $2.26 billion from $1.99 billion in the prior year. Eighteen analysts had a consensus sales estimate of $2.27 billion for the quarter.

Among regions, the company benefited from growth in the U.S., China, Taiwan, and Southeast Asia, while Europe, Korea and Japan declined.

On an adjusted basis, gross margin for the quarter improved 220 basis points from last year to 44.2 percent, and operating margin to 19.5 percent from 16.2 percent.

For the first quarter, Applied Materials expect adjusted earnings in the range of $0.25 to $0.29 per share and sales in the range of flat to up 5 percent from the prior quarter.

Analysts currently expect earnings of $0.31 per share on sales of $2.37 billion for the quarter.

Applied Materials' equipment is purchased by chip companies to make smartphone and memory chips, and its sales throw some light on the demand pattern of the the electronics market.

In September 2013, Applied Materials agreed to acquire Japanese peer Tokyo Electron for about $9.4 billion. The completion of the merger could take until next year due to delays in regulatory approvals.

The merged company, Eteris, will be incorporated in The Netherlands, having a new name, dual headquarters in Tokyo and Santa Clara, as well as a dual listing on the Tokyo Stock Exchange and the Nasdaq.

Applied Materials shareholders will own about 68 percent of the merged company and Tokyo Electron shareholders will own the rest.

AMAT closed Thursday at $22.62, up $0.13 or 0.58%, on a volume of 12.4 million shares on the Nasdaq. In after hours, the stock dropped $0.81 or 3.58% at $21.81.