Applied Materials Inc. Earnings Cheat Sheet: Weak Revenue Lead to Profit Decline

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 Fourth Quarter

Results: Net income for the semiconductor equipment and materials company fell to $456 million (34 cents per share) vs. $468 million (35 cents per share) a year earlier. This is a decline of 2.6% from the year earlier quarter.

Revenue: Fell 24.5% to $2.18 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AMAT reported adjusted net income of 21 cents per share. By that measure, the company beat the mean estimate of 20 cents per share. Analysts were expecting revenue of $2.16 billion.

Quoting Management: “Applied’s record year was driven by strength in our silicon business and our highest-ever revenue in solar and services, as well as strategic programs that improved the efficiency of our operations,” said Mike Splinter, chairman and chief executive officer. “While we expect the first half of fiscal 2012 to be impacted by the challenging economic environment, we anticipate that our overall business will strengthen during the second half of the year.” After the end of the quarter, Applied completed the acquisition of Varian Semiconductor Equipment. “The combination of Applied and Varian creates the industry leader in transistor technologies,” Splinter added. “Together, we will partner with our customers to accelerate the development of new generations of chips enabling smaller, faster and more power-efficient mobile devices.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the third quarter, net income rose more than threefold from the year earlier, while the figure increased 85.2% in the second quarter, more than sixfold in the first quarter and more than threefold in the fourth quarter of the last fiscal year.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 89.1%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 2 cents in the third quarter, by one cent in the second quarter, and by 3 cents in the first quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 33 cents per share to 18 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $1.41 a share to $1.30 over the last ninety days.

Competitors to Watch: Novellus Systems, Inc. (NASDAQ:NVLS), KLA-Tencor Corporation (NASDAQ:KLAC), Lam Research Corporation (NASDAQ:LRCX), Mattson Technology, Inc. (NASDAQ:MTSN), FSI International, Inc. (NASDAQ:FSII), Tegal Corporation (NASDAQ:TGAL), Axcelis Technologies, Inc. (NASDAQ:ACLS), Ultratech, Inc. (NASDAQ:UTEK), CVD Equipment Corporation (NASDAQ:CVV), and ASM Intl. N.V. (NASDAQ:ASMI).

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