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Chip equipment supplier Applied Materials reported better than expected fiscal fourth quarter earnings after the market close Thursday. Last quarter $AMAT showed a 44% dip in earnings as weak performance from all three segments hurt net sales.

AMAT Chip Making

Applied Materials, Inc. NASDAQ: AMAT Reported Earnings After Close Thursday

$0.80 Beat $0.76 EPS AND $3.754 Beat $3.68 Billion Revenue Forecast 

Earnings

Applied Materials announced its fourth-quarter earnings after the close Thursday with Adj. EPS $0.8 on Sales of $3.754B which beat analysts estimated earnings of $0.76 per share on revenue of $3.68 billion. This compares to earnings of $0.97 per share on revenue of $4.01 billion reported a year earlier. GAAP EPS of $0.75 was in-line.

Last quarter, Applied Materials saw revenue declines in all three business divisions due to a challenging market environment. The company has been focusing on developing new products and capabilities and this might help it see a pickup in the fourth quarter results.

Applied Materials, Inc. NASDAQ: AMAT

Market Reaction - After hours $59.00 +2.04 (+3.58%)

Highlights

  • On a GAAP basis, the company recorded gross margin of 43.5 percent, operating income of $864 million or 23.0 percent of net sales, and earnings per share (EPS) of $0.75.
  • On a non-GAAP adjusted basis, the company reported gross margin of 43.8 percent, operating income of $888 million or 23.7 percent of net sales, and EPS of $0.80.
  • The company returned $694 million to shareholders including $500 million in share repurchases and dividends of $194 million.

Outlook

Applied Materials Sees Q1 Adj. EPS $0.87-$0.95 vs $0.74 Estimate, Sales $4.1B +/- $150M vs $3.71B Est.

Applied Materials Q3 Earnings Recap

$0.74 Beat $0.70 EPS AND $3.56B Beat $3.52 Billion Revenue Forecast 

Earnings

Applied Materials announced its third-quarter earnings of adjusted earnings per share of 74 cents on revenue of $3.56 billion. Analysts expected earnings per share of 70 cents on revenue of $3.52 billion, according to Refinitiv. Net income plunged by 44% to $571 million or $0.61 per share.

Gary Dickerson, president and CEO, said going forward the company is “fully funding our R&D programs to develop new products and capabilities”.

Applied Materials, Inc. NASDAQ: AMAT

Market Reaction - After hours $46.99 −0.17 (-0.36%)

Highlights

      • During the third quarter, sales declined in the all the three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets.
      • From a geography perspective, the double-digit sales growth in the US and Taiwan were hampered by weak sales from other regions.
      • The company has been struggling in the challenging market environment.
      • Applied Materials gets majority of the revenue contribution from Asia Pacific region, with China being a significant benefactor. The trade war between the US and China turned out to be a major headwind in the contribution from China.

Applied Materials Q3 2019 Earnings

Outlook

      • Looking ahead into the fourth quarter, the company expects net sales to be about $3.685 billion, plus or minus $150 million.
      • Adjusted earnings are anticipated to be in the range of $0.72 to $0.80 per share.

 Source: AMAT; AlphaStreet

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