Applied Materials' guidance disappoints, but orders pick up

|By:, SA News Editor

Applied Materials (AMAT) is guiding for 3%-10% Q/Q FQ1 revenue growth, and quarterly EPS of $0.20-$0.24. That's largely below a consensus for 11% growth (to $2.21B) and EPS of $0.24.

Backlog rose 4% Q/Q in FQ4 to $2.37B after barely moving in FQ3. Orders rose 5% Q/Q to $2.09B after dropping 12% in FQ3. Book-to-bill was 1.05, better than FQ3's 1.01.

Ahead of the Tokyo Electron merger, chip equipment division orders rose 16% Q/Q to $1.39B (67% of all orders) after dropping 22% in FQ3. Foundry, flash memory, and logic-related orders all rose, while DRAM-related orders fell.

Global services orders rose 6% Q/Q to $548M after rising 7% in FQ3. Display equipment orders plunged 55% to $114M after rising 31% in FQ3. Solar equipment orders more than doubled Q/Q, but still only totaled $40M.

$245M was spent on buybacks. Gross margin was 42%, -90 bps Q/Q but +360 bps Y/Y.

AMAT -0.6% AH. CC at 4:30PM ET.

FQ4 results, PR