Applied Materials, Inc. (AMAT), the world's biggest semiconductor equipment maker, is slated to release its fourth-quarter results after the market closes Wednesday.
In its third-quarter earnings conference call, the Santa Clara, California-based company said it expects to return to profitability in the fourth quarter, with earnings within a range of break even to a positive $0.04 per share, and revenues are projected rise 10% to 20% sequentially, led by display, SSG and AGS, implying fourth-quarter revenue of $1.24 billion to $1.36 billion.
On average, 27 analysts surveyed by Thomson Reuters expect the company to post earnings of $0.03 per share for the quarter, with estimates ranging between $0.01 and $0.06 per share. Analysts' estimates typically exclude special items. Revenues for the quarter are estimated to be $1.32 billion, representing a 35.6% fall from the same period last year. In the same quarter a year ago, the company had reported GAAP net income of $231 million or $0.17 per share, non-GAAP net income of $264 million or $0.20 per share, and net sales of $2.04 billion.
For the fiscal year 2009, Wall Street analysts project a loss of $0.14 per share, with estimates between loss of $0.18 and $0.11 per share, while revenue is estimated to be $4.80 billion, representing a 40.9% decline from the previous year.
FBR Capital Markets Tuesday revised its fiscal 2009 forecast for Applied Materials and now expects loss of $0.05 per share, compared to previous loss forecast of $0.06 per share.
In fiscal 2008, the company's GAAP net income was $961 million or $0.70 per share, and non-GAAP net income was $1.20 billion or $0.87 per share, on net sales of $8.13 billion.
During the third-quarter conference call with analysts, Mike Splinter, Chairman and Chief Executive Officer had stated that there are more indications that "demand is growing and for the first time in a long while we see positive trends in our business. This quarter our financial results improved in almost every category and we are seeing order growth following the steep declines of the first half of our fiscal year."
While talking about the company's expectations for the fourth quarter, Applied Materials Chief Financial Officer George Davis said, "The economic and industry trends are generally more favorable than last quarter. Our customers remain cautious and are focused on near-term opportunities. Visibility beyond one to two months remains limited. We expect that a number of factors may cause customers to change their investment plans. While we are not giving a company target for orders we do expect growth in orders quarter-over-quarter driven primarily by higher display and EES orders."
In its third quarter, Applied Materials had reported a GAAP net loss of $54.9 million or $0.04 per share, compared to profit in the corresponding period last year, as sales dropped 39% to $1.13 billion amid weak demand in light of the continuing global recession. This marked the third consecutive quarterly loss for the company following a string of profits running back to 2003. Non-GAAP net loss for the third quarter was $1.6 million or break-even per share, compared to non-GAAP net income of $227.7 million or $0.17 per share in the prior year quarter. Sales from the company's silicon business slid 34%, sales from display business dropped 78%, sales from services business fell 43%, while sales from its energy and environmental solutions business jumped 29%. New orders for the third quarter totaled $1.07 billion, down 47% from a year ago.
Splinter then said, "In a difficult environment, Applied improved its operating performance and generated significant cash flow while making substantial investments in new technologies for next-generation semiconductor chips, flat panel displays and solar panels."
Founded in 1967, Applied Materials, a Nanomanufacturing Technology solutions provider, designs, manufactures, and sells semiconductor fabrication equipment worldwide. The company has a broad portfolio of innovative equipment, service and software products for the fabrication of semiconductor chips, flat panel displays, solar photovoltaic cells, flexible electronics and energy efficient glass.
Semiconductor gear makers had been in red due to a difficult semiconductor industry environment. However, recent results have shown a marked improvement in new orders, signaling that the market may have bottomed out.
The Semiconductor Industry Association, or SIA, in a November 2 statement said that worldwide sales of semiconductors in the quarter ended September 30 were $61.9 billion, down 10.1% from last year's $68.9 billion, but up 19.7% from $51.7 billion in the preceding quarter.
SIA President George Scalise then said, "Global semiconductor sales in the third quarter were above expectations. September sales were in line with historical patterns, reflecting increased demand from end-users as they began the build for the holiday season. Unit sales of personal computers and cell phones - the two largest demand drivers for semiconductors - continue to run ahead of earlier forecasts. Meanwhile, demand for semiconductors for industrial applications - a sector that had declined sharply -- showed initial signs of recovery. Sales increased in all geographic regions." Scalise added, "Amid signs that we are in the early stages of recovery in the global economy, semiconductor sales continue to reflect normal seasonal patterns. Sales are running well ahead of the worst-case scenarios projected early in the year, and we are optimistic that total sales for 2009 will be better than our mid-year forecast."
Among others in the sector, KLA-Tencor Corp. (KLAC) in late October reported that its first quarter profit increased slightly from last year, helped by a sharp increase in demand from foundry customers, a one-time non-operating gain and a lower than normal tax rate. The Milpitas, California-based semiconductor equipment maker's GAAP net income was $20.4 million or $0.12 per share, compared to $19.3 million or $0.11 per share for the year-ago quarter. With this, the company has returned to black after three consecutive quarters of losses. Excluding items, non-GAAP net income for the first quarter was $26.2 million or $0.15 per share, compared to $55.4 million or $0.32 per share in the prior year quarter. Total revenue for the first quarter fell 36% to $342.69 million from $532.51 million last year.
According to Rick Wallace, President and Chief Executive Officer of KLA-Tencor, the company delivered stronger-than-expected results and returned to profitability in the first quarter of fiscal 2010, led by a sharp increase in demand from foundry customers.
Semiconductor processing equipment maker Lam Research Corp. (LRCX) on October 21 reported a substantial increase in its first-quarter profit, as lower expenses and improved gross margin helped offset decline in quarterly revenues. Net income of Fremont, California-based company nearly doubled to $16.80 million or $0.13 per share from $8.87 million or $0.07 per share a year ago. Ongoing net income was $4.2 million or $0.03 per share. Lam Research's revenue fell to $318.55 million from $440.36 million in the year-earlier quarter. The company noted that strong shipments and revenue performance in the quarter helped it to return to profitability sequentially.
Semiconductor equipment maker Novellus Systems, Inc. (NVLS) recently reported a loss for the third quarter, compared to a profit last year, reflecting a significant decline in net sales. Net loss for the quarter was $4.03 million or $0.04 per share, compared to net income of $1.40 million or $0.01 per share a year earlier. Excluding certain charges, net loss was $2.51 million or $0.03 per share, compared to net income of $2.79 million or $0.03 per share last year. The San Jose, California-based company's net sales dropped to $176.88 million from $250.10 million for the year-ago period.
In its annual forecast of global semiconductor sales, released on November 5, SIA projected worldwide sales of $219.7 billion for 2009, a decline of 11.6% from the $248.6 billion reported in 2008. The forecast projects that sales will grow by 10.2% to $242.1 billion in 2010 and by 8.4% to $262.3 billion in 2011. According to Scalise, "The new forecast is brighter than our earlier projections, reflecting an improving global economy. Unit sales of key demand drivers - including PCs and cell phones, which together account for about 60 percent of semiconductor demand - have been stronger than previously predicted. We remain cautiously optimistic for the longer term. The current forecast is closely tied to projections of continuing improvement in the worldwide economy."
On November 6, Applied Materials, a supplier of equipment and services to the solar photovoltaic, or PV, industry, said it has acquired substantially all the assets, including the intellectual property, of Advent Solar, Inc. for an undisclosed cash amount. The acquisition of Advent Solar, a developer of advanced technology for crystalline silicon Pvs, is expected to complement Applied's portfolio of solar PV technologies and enhance its leadership in the c-Si equipment market.
AMAT closed Tuesday's regular trading session at $13.00, up $0.02 or 0.15%, on a volume of 21.54 million shares. In the past 52 weeks, shares have been trading between $7.80 and $14.19.
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.