Applied Materials Profit In Line; Details Weak Q4

(RTTNews) - Semiconductor equipment maker Applied Materials Inc (AMAT) on Thursday reported a higher third-quarter profit, driven by a 10 percent increase in sales, partly offset by lower margins. However, quarterly earnings came in line with Wall Street estimates, while sales missed expectations.

Looking forward to the fourth quarter, the company detailed some weak outlook.

Applied Materials, which provides semiconductor fabrication tools to chip makers, reported third-quarter net income of $329 million or $0.27 per share, compared with $301 million or $0.24 per share last year.

Excluding items, adjusted earnings for the quarter were $0.33 per share, compared with $0.28 per share in the prior year. On average, 20 analysts polled by Thomson Reuters expected earnings of $0.33 per share for the quarter. Analysts' estimates typically exclude special items.

The Santa Clara, California-based company reported quarterly sales of $2.49 billion, compared with $2.27 billion a year ago. Nineteen analysts had a consensus revenue estimate of $2.54 billion for the quarter.

Growth was seen across the company's silicon systems, applied global services, and display segments, while energy and environmental solutions dropped.

Gross margin for the third quarter dropped to 40.9 percent from 43.8 percent last year, and operating margin slid to 15.9 percent from 17.3 percent.

Third-quarter orders were up 17 percent from a year ago to $2.89 billion, the company said.

For the fourth quarter, Applied expects adjusted earnings of $0.27 to $0.31 per share; and sales to be flat to down 7% sequentially, implying an aggregate of about $2.32 billion. Analysts expect earnings of $0.33 per share on sales of $2.51 billion for the quarter.

In April, Applied Materials jettisoned an ambitious merger proposal with Tokyo Electron Ltd, citing opposition from the Justice Department.

AMAT closed Thursday at $17.05, down $0.25 or 1.45%, on a volume of 17.2 million shares on the Nasdaq. In after hours, the stock dropped $0.20 or 1.17%, trading at $16.85.