Applied Materials Inc. Earnings: Profit Falls Behind Revenue Decline

S&P 500 (NYSE:SPY) component Applied Materials Inc. (NASDAQ:AMAT) saw profit fall amid falling revenue. 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 First Quarter

Results: Net income for Applied Materials Inc. fell to $117 million (9 cents per share) vs. $506 million (38 cents per share) a year earlier. This is a decline of 76.9% from the year earlier quarter.

Revenue: Fell 18.5% to $2.19 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Applied Materials Inc. reported adjusted net income of 18 cents per share. By that measure, the company beat the mean estimate of 12 cents per share. It beat the average revenue estimate of $1.97 billion.

Quoting Management: “Global demand for mobile devices is driving a third consecutive year of strong capital investment by semiconductor customers,” said Mike Splinter, chairman and chief executive officer. “As a result, we see solid order momentum and an improved outlook overall for our second quarter.”

Key Stats:

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

The company has now seen net income fall in each of the last two quarters. In the fourth quarter of the last fiscal year, net income fell 2.8% from the year earlier quarter.

Revenue has fallen in the past two quarters. In the fourth quarter of the last fiscal year, revenue declined 24.4% to $2.18 billion from the year earlier quarter.

The company’s gross margin shrank by 6.4 percentage points. Revenue fell 18.5% while cost of sales fell 9.5% to $1.4 billion from a year earlier.

Looking Forward: Over the past ninety days, the average estimate for the second quarter has fallen from 20 cents per share to 17 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 98 cents a share to 81 cents over the last ninety days.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com