Tuesday, November 16, 2010

Applied Materials Inc. (NASDAQ: AMAT): Q4 Earnings Preview

Applied Materials Inc. (NASDAQ: AMAT) is scheduled to release fiscal fourth-quarter earnings after the closing bell on Wednesday, November 17, 2010. Analysts, on average, expect the company to report earnings of 31 cents a share on revenue of $2.59 billion. In the year ago period, the company reported earnings of 11 cents per share on revenue of $1.53 billion.

Applied Materials, Inc. provides nanomanufacturing technology solutions for the semiconductor, flat panel display, solar, and related industries worldwide. It operates in four segments: Silicon, Applied Global Services, Display, and Energy and Environmental Solutions. 

In the preceding fiscal third-quarter, the Santa Clara, California-based company's net income was $123 million, or 9 cents a share, compared to a loss of $55 million, or 4 cents a share, in the year-ago quarter.  On an adjusted basis, the company earned 17 cents a share in the latest quarter. The inventory-related charges lowered gross margin by approximately 10 percentage points and reduced GAAP and non-GAAP EPS by $0.12. Excluding the EES restructuring plan charges, non-GAAP EPS would have been 29 cents per share. Revenue jumped to $2.52 billion from $1.13 billion. Analysts, on average, expected the company to report earnings of 25 cents per share on revenue of $2.37 billion. 

At its last last earnings call in August, the company said that it expects fourth quarter net sales to be in the range of flat to up 5 percent quarter over quarter. The company anticipates non-GAAP EPS to be in the range of $0.28 to $0.32 which excludes known charges related to completed acquisitions of approximately $0.01 per share.

For the full fiscal 2010, the company expects revenue to be in the range of $9.2 billion to $9.3 billion, up over 80% versus 2009, with non-GAAP net income in the range of $0.80 to $0.84 per share. Excluding items such as year-to-date EES inventory related charges, the company expects fiscal year 2010 earnings between $0.96 and $1 per share.

Demand for PCs, mobile phones, and new devices including the iPad boosted chips in 2010. A global recovery after the sharp downturn last year also helped, as chip makers produced more chips to refill global inventories. Recently, the Semiconductor Industry Association predicted that worldwide chip sales for 2010 would total $300.5 billion, an increase of 33 percent over 2009 sales. That's more than the group had predicted in June, when it forecast 2010 sales of $290.5 billion.

The company's stock currently trades at a forward P/E (fye Oct 25, 2011) of 10.42 and PEG Ratio (5 yr expected) of 1.03. In terms of stock performance, Applied Materials shares have lost nearly 9% since the beginning of the year.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire