Applied Materials, Inc. Earnings: Five Quarters in a Row of Expanding Margins, Net Income Climbs

S&P 500 (NYSE:SPY) component Applied Materials, Inc. (NASDAQ:AMAT) reported higher profit for the second quarter as revenue showed growth. Applied Materials Inc. is a manufacturer and producer of capital equipments. 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 Second Quarter

Results: Net income for Applied Materials, Inc. rose to $489 million (37 cents/share) vs. $264 million (20 cents/share) in the same quarter a year earlier. A rise of 85.2% from the year earlier quarter.

Revenue: Rose 24.7% to $2.86 billion YoY.

Actual vs. Wall St. Expectations: AMAT reported adjusted net income of of 38 cents/share. By that measure, the company beat the mean estimate of 37 cents/share. Estimates ranged from 35 cents per share to 39 cents per share. It beat the average revenue estimate of $2.77 billion.

Quoting Management: “Applied delivered one of the best quarters in the company’s history, including record net sales in our solar business,” said Mike Splinter, chairman and chief executive officer. “While near-term economic conditions have tempered our growth expectations, our outlook for the year remains strong driven by our customers’ plans to invest in the advanced technologies needed to meet growing demand for mobile devices and consumer electronics.”

Key Stats:

The company has enjoyed double-digit year-over-year revenue growth for the past five quarters. Over that span, the company has averaged growth of 81.2%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose more than twofold from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.2 percentage points to 41.5% from the year earlier quarter. Over that span, margins have grown on average 8.2 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 2 cents in first quarter and by 4 cents in fourth quarter of the last fiscal year.

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).

Stock Performance: Shares of AMAT are down 1.82% after hours.

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(Sources: YahooFinance, Xignite Financials)

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