Earnings Preview: Applied Materials

Feb.16.12 | About: Applied Materials, (AMAT)

Applied Materials (NASDAQ:AMAT) is expected to report Q1 earnings after the market close on Thursday, February 16, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is 12c for EPS and $1.97B for revenue, according to First Call. Applied Materials projects Q1 revenue to decrease 5%-15% sequentially. Non-GAAP EPS is expected to come in at 8c-16c per share.

Analyst Views

Analysts believe that Display and EES sales will fall, but be in-line with guidance, due to the ongoing solar and LCD panel inventory glut. Piper expects a strong finish to CY11 and a positive outlook for FY12 from Applied Materials. The firm estimates Q1 revenues to be down -15% quarter-over-quarter at $1.85B. However, given the strength shown by its peers and sub suppliers like Ultra Clean (NASDAQ:UCTT) in their Dec '11 results, Piper believe Applied Materials' overall revenues could come in at the top of its guidance range and possibly exceed its and consensus estimates. Clearly the biggest driver in terms of Jan '12 revenues is the Silicon systems segment, which is about 60% of total sales, where investors are likely to see both revenue and order upside given the strength from Samsung. Piper expects the cold freeze in the solar and display segments to continue through 1H12. Consensus for Q2: 16c on $2.08B in revenue. Consensus for FY12: 77c on revenue of $8.91B. Guidance from the last call for FY12 was for capex to be down 10%-20%; solar panel demand growing 10%-30%; and semiconductor equipment market improving in early 2012.