Applied Materials Q3 Beats Street, But Gives Weak Guidance

| About: Applied Materials, (AMAT)

Applied Materials reported fiscal Q3 net income fell 7.5% to $473.5 million, or $0.34/share on sales growth of less than 1% to $2.56B, topping analyst expectations of $0.32/share on sales of $2.53B. Shares fell 3.8% to $20.43 after the release, mostly due to disappointing Q4 guidance.AMAT-EarningsChart-8-15-2007 Applied forecast Q4 EPS of $0.26-$0.29, on revenues of $2.26B-$2.39B. Analysts were expecting $0.30/share on sales of $2.46B. For Q3, Applied said new orders fell 14% both y/y and sequentially, to $2.28B. Gross margin declined 6% to 47.5%, but improved 2.6% over Q2. CEO Michael Splinter said "... equipment spending will be slightly lower in the second half of the calendar year, primarily due to foundry spending not materializing [despite utilization moving into the 90% range, as existing lines are being stretched and the 65-nm ramp is taking longer to develop than anticipated]. While foundry remains weak, we expect memory capital investment to remain relatively strong and logic to be flat" (full earnings call transcript). Shares of Applied lost 2.3% to $21.24 during normal trading Tuesday.

Sources: Press release, Bloomberg, MarketWatch
Commentary: Best, Worst Performing Stocks Since the Market Top On 7/16BOA On Semi Equipment Stocks: DRAM Price Pop Mere Inventory BuildChipmakers Slash 2007 Forecasts
Stocks/ETFs to watch: AMAT. Competitors: KLAC, LRCX, NVLS. ETFs: SMH, IGW, PSI, PBW

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

About this article:

Tagged: , Semiconductor Equipment & Materials, Earnings
Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here