EARNINGS: Applied Materials’ Net Income Dips, Stock Does Too

S&P 500 (NYSE:SPY) component Applied Materials Inc. (NASDAQ:AMAT) posted a decrease in profit as revenue declined. Applied Materials manufacturers and produces capital equipments, and it provides manufacturing equipment, software, and solutions for the global semiconductor, flat panel liquid crystal displays, solar, and related industries.

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Applied Materials Earnings Cheat Sheet for the Third Quarter

Results: Net income for Applied Materials Inc. fell to $218 million (17 cents per share) vs. $476 million (36 cents per share) a year earlier. This is a decline of 54.2% from the year-earlier quarter.

Revenue: Fell 15.9% to $2.34 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Applied Materials Inc. fell short of the mean analyst estimate of 22 cents per share. It fell short of the average revenue estimate of $2.39 billion.

Quoting Management: “We delivered solid financial performance in line with our outlook despite challenging industry conditions in semiconductor, display and solar,” said Mike Splinter, chairman and CEO. “Economic uncertainty is weighing on top of a seasonal pullback to produce weaker near-term demand.”

Key Stats:

The company has now seen net income fall for four straight quarters. In the second quarter, net income fell 40.9% while the figure fell 76.9% in the first quarter and 2.8% in the fourth quarter of the last fiscal year.

Revenue has fallen for the last four quarters. Revenue declined 11.2% to $2.54 billion in the second quarter. The figure fell 18.5% in the first quarter from the year earlier and dropped 24.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the second quarter, it topped the mark by 3 cents, and in the first quarter, it was ahead by 6 cents.

The company’s cost of sales fell 11.9% from a year earlier to $1.41 billion. Last quarter, cost of sales was 60.3% of revenue versus 57.5% a year earlier.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 15 cents per share, down from 26 cents ninety days ago. The average estimate for the fiscal year is 82 cents per share, falling from 95 cents thirty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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