Earnings Preview: Applied Materials

Applied Materials (AMAT) is expected to report Q4 earnings after market close Wednesday Nov. 12, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is 14c for EPS and $1.94B for revenue, according to First Call.

Analyst Views

Soleil expects Applied to report Q4 results with a marginal (one penny) upside to the current consensus forecast of 14c on a slightly higher than expected revenue helped by flat panel display and solar business. Similarly to other equipment vendors, Soleil expects Applied to guide Q1 below consensus estimates of $1.95B and 16c, due to push outs of equipment deliveries by Samsung and second tier FPD manufacturers in Taiwan. Specifically, Soleil anticipates Q4 orders at $1.65B, down 13%+ QoQ and below the company's guidance for Q4 orders being up 5% to 10% QoQ. Soleil reiterates their forecast of a likely trough for AMAT's overall business in 1Q09 and recommend buying the stock near current 10-year low price levels.

Kaufman expects the company to report GAAP EPS of 14c on $1.92B of revenue. Kaufman said the probability is high that the company will exceed these numbers due to revenue recognition allowances for solar equipment that was shipped as long ago as last year. Kaufman feels this will mask over weakness in the semiconductor channel. The firm believes the focus of the call will almost exclusively be the solar side of the business and of financing.

Key issues for the conference call: Forward guidance; commentary about orders going forward; and comments on any workforce reductions. Trading wise: Applied Materials has a tendency to narrow its after-hours movement the next day following an evening earnings event.