For a quarter that saw the Santa Clara, California-based Applied Materials Inc.'s (AMAT) major solar order slashed to $250 million from $1.9 billion amid the recession, analysts are expecting a loss of $0.10 per share on revenues of $904.35 million. The second-quarter results are due to be released after market closes on May 12.
Applied Materials, which is the world's biggest semiconductor equipment maker, has recently tried to offset the swings in demand for chip machinery by entering the solar-energy equipment market. However, by then, the rough and tumble economy and stiff credit conditions had taken their toll on the solar-power industry.
Banks have restricted funding for major solar projects. Spain, the world's second-largest solar-power market trailing Germany, has cut subsidies for the solar industry, resulting in a sharp fall in demand for solar cells. Sales of solar chips that convert sun's rays into electricity are expected to decline by at least 20% this year.
Most recently, Applied Materials announced agreements to supply its SunFab thin film tandem junction solar production equipment and related services to an undisclosed privately held company for an aggregate purchase price of about $1.9 billion. But, later, deteriorating economic and financial market conditions forced an amendment to the agreement to reduce production capacity to be supplied by Applied Materials and the aggregate purchase price to about $250 million.
For the preceding first quarter, Applied Materials slipped to a net loss of $132.9 million or $0.10 per share from a profit of $262.4 million or $0.19 per share in the year-ago quarter, hurt by a steep decline in sales and a hefty restructuring charge. Net sales fell 36% to $1.33 billion from $2.09 billion in the previous year.
Amid the recession, demand for manufactured electronic items continues to fall off coercing semiconductor chipmakers to live through sinking sales. Worldwide sales of semiconductors dropped 29.9% year-over-year to $14.7 billion in March 2009, the Semiconductor Industry Association or SIA said.
Among Applied Materials' rivals, KLA-Tencor Corp. (KLAC) incurred a net loss of $82.83 million or $0.49 per share for the third-quarter, compared to a profit of $110.98 million or $0.61 per share in the same quarter a year ago, hurt by a sharp decline in revenues as well as charges related to restructuring and other items. Quarterly revenues nearly halved to $310 million from $602 million in the previous year.
Another peer, Lam Research Corp. (LRCX) posted a third quarter net loss of $198.36 million or $1.58 per share, compared to a profit of $103.52 million or $0.82 per share a year ago. Revenues plummeted 71.6% to $174.41 million from $613.81 million in the prior-year quarter.
SIA President George Scalise said, "The global chip industry continues to reflect the influence of the worldwide economic slowdown. We expect economic stimulus measures in the U.S. combined with other countries will begin to impact sales as we enter 2010."
Applied Materials is currently trading at $11.36, down 36 cents or 3.16% on a volume of 3.94 million shares. The stock has been trading between $7.80 and $20.90 in the past 52 weeks, with a three-month average volume of about 23.8 million shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.