Applied Materials Inc. (AMAT) Thursday reported a swing to loss in the second quarter, as the semiconductor equipment maker's sales continued to decline in a weak economy. The bottom line was also impacted by impairment charges.
Nonetheless, adjusted earnings for three-month period came in ahead of Wall Street's expectations, as did revenues. Moving forward, Applied Materials detailed an outlook for its third-quarter, which is indicated to fall short of current estimates.
Applied Materials is one of the largest equipment supplier to the chip making industry. Its customers includes big chip making companies like Intel Corp. (INTC), Samsung Electronics Co. However, a weak global economy and slowing sales of computers and desktops have caused the chip makers to spend less, thus affecting Applied Materials and the industry as a whole.
Applied Materials' second-quarter revenues declined to $1.97 billion from $2.54 billion last year. Analysts polled by Thomson Reuters expected revenues of $1.91 billion for the period.
Chief Executive Mike Splinter said, "For the second quarter in a row, Applied had strong order performance of over $2 billion. We are seeing increasing pull from some of our largest strategic customers for our key enabling technologies. We remain committed to driving profitable growth."
Adjusted gross margin improved to 43.2 percent from 42.1 percent last year.
Santa Clara, California-based Applied Materials reported a second-quarter loss of $129 million or $0.11 per share, compared to a profit of $289 million or $0.22 per share last year.
Loss for the quarter included goodwill and intangible asset impairment charges associated with the Energy and Environmental Solutions segment of $278 million.
Adjusted earnings dropped to $0.16 per share from $0.27 per share last year. On average, 15 analysts expected earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.
Looking ahead to the third quarter, the company expects adjusted earnings in the range of $0.16 to $0.20 per share. Analysts currently expect third-quarter earnings of $0.19 per share.
Applied Materials anticipates third-quarter sales to be up "slightly" from the second quarter. Analysts currently estimate revenues of $2.12 billion, or a growth of 7.6 percent sequentially.
AMAT closed Thursday's regular trade at $14.66, down $0.14 or 0.95%, on the Nasdaq. The stock further slipped $0.06 or 0.41% in after hours.
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