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Applied Materials rises on FQ2 beat, healthy orders

May 14, 2015 4:25 PM ETApplied Materials, Inc. (AMAT) StockAMATBy: Eric Jhonsa, SA News Editor1 Comment
  • After beating FQ2 estimates, Applied Materials (NASDAQ:AMAT) is guiding for FQ3 revenue to be up 2%-6% Q/Q and EPS to be in a range of $0.31-$0.35. That's in-line with a consensus for 3% Q/Q revenue growth (to $2.52B) and EPS of $0.33.
  • Orders/backlog: FQ2 orders totaled $2.52B, +11% Q/Q and -4% Y/Y, and topping revenue of $2.44B (1.03 book-to-bill). Chip equipment division orders +19% Q/Q to $1.7B; services orders -7% to $641M; display equipment orders +12% to $120M; energy/environmental (solar) orders flat at $50M. Backlog was flat Q/Q at $2.78B, thanks to negative adjustments of $69M.
  • Chip equipment order breakdown: 36% foundry, 31% DRAM, 21% flash, 12% logic/other. Foundry, flash, and DRAM orders grew Q/Q (Samsung and TSMC's investments likely helped), while logic/other (Intel's capex budget cut likely hurt) fell. Services orders were hurt by a seasonal decline in contract renewals; display orders benefited from TV equipment demand.
  • Financials: Gross margin was 43.2%, +90 bps Q/Q and -100 bps Y/Y. Excluding one-time charges, GAAP operating expenses rose 4% Y/Y to $614M - $365M was spent on R&D, $109M on sales/marketing, and $140M on G&A. Op. margin fell to 19.5% from 20.5% a year ago.
  • AMAT +2% AH to $20.25.
  • FQ2 results, PR

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