Applied Materials Reports Better Than Expected Q4 Results, Provides Guidance

Applied Materials (NASDAQ:AMAT) shares rose around 2% intra-day today after the company reported fiscal second-quarter results and guidance, surpassing estimates as the artificial intelligence wave continues to drive chip demand.

For Q2, the company posted adjusted diluted earnings per share (EPS) of $2.09, up from $2.00 the previous year, while revenue increased to $6.65 billion from $6.63 billion. Analysts had expected EPS of $1.99 on revenue of $6.52 billion. The gross margin improved to 47.5% from 46.8% a year earlier.

Looking ahead to Q3, Applied Materials projected adjusted EPS in the range of $1.83 to $2.19 per share on sales of approximately $6.65 billion, plus or minus $400 million. Wall Street estimates had forecasted adjusted earnings of $1.98 per share on $6.59 billion in revenue.

Applied Materials, Inc. (NASDAQ:AMAT), a leading company in the semiconductor equipment and wafer fabrication industry, recently reported its second-quarter earnings, showcasing a strong financial performance that exceeded analysts' expectations. On Thursday, May 16, 2024, AMAT announced earnings per share (EPS) of $2.09, surpassing the estimated $1.99, and reported revenue of $6.65 billion, beating the forecasted $6.54 billion. This performance not only highlights the company's ability to outperform market expectations but also underscores its significant role in the semiconductor sector.

The company's EPS of $2.09 exceeded the Zacks Consensus Estimate of $1.97, marking a 6.09% earnings surprise and representing an improvement from the $2 per share earned a year ago. This quarter's results continue AMAT's trend of surpassing consensus EPS estimates for the fourth consecutive quarter, previously outperforming expectations with earnings of $2.13 per share against an anticipated $1.90, reflecting a surprise of 12.11%. Such consistent performance in earnings surprises underscores the company's operational efficiency and its ability to navigate the complexities of the semiconductor industry effectively.

In terms of revenue, Applied Materials posted $6.65 billion for the quarter ending April 2024, not only surpassing the Zacks Consensus Estimate by 2.04% but also showing a slight increase from the previous year's revenues of $6.63 billion. This marks the fourth consecutive time the company has exceeded consensus revenue estimates, indicating a steady growth trajectory and reinforcing its market leadership in the semiconductor equipment sector. The company's ability to consistently generate higher revenues speaks volumes about its competitive edge and the increasing demand for its products and services.

Financial metrics such as the price-to-earnings (P/E) ratio of approximately 24.85 and the price-to-sales (P/S) ratio of about 6.71 reflect investor confidence in AMAT's profitability and sales performance. Additionally, the enterprise value-to-sales (EV/Sales) ratio of roughly 6.68 and the enterprise value-to-operating cash flow (EV/OCF) ratio of around 20.21 further highlight the company's valuation in comparison to its sales and operating cash flow, respectively. These ratios, combined with an earnings yield of approximately 4.02% and a balanced debt-to-equity (D/E) ratio of about 0.33, present a comprehensive picture of Applied Materials' financial health and its attractiveness to investors.

Applied Materials' recent financial results not only demonstrate its strong position within the semiconductor equipment industry but also signal positive implications for the broader chip industry, especially in the context of the ongoing artificial intelligence race. The company's ability to consistently exceed earnings and revenue expectations reflects its strategic operational excellence and positions it as a key player in the technological advancements shaping the future of the semiconductor sector.

Applied Materials, Inc. (NASDAQ:AMAT), a leading company in the semiconductor equipment industry, is gearing up to release its quarterly earnings report on Thursday, May 16, 2024, after the market closes. The company, known for its contributions to the semiconductor manufacturing process, faces stiff competition from other industry giants but continues to hold a significant market share due to its innovative solutions and comprehensive service offerings. Wall Street has set its sights on an earnings per share (EPS) of $1.96, with revenue estimates hovering around $6.54 billion for the quarter.

The upcoming earnings report is particularly noteworthy as it encompasses the performance of Applied Materials' Applied Global Services segment and the ICAPS portfolio, despite the backdrop of macroeconomic challenges. The company has provided a revenue forecast in the range of $6.50 billion, with a possible variation of plus or minus $400 million, closely aligning with the Zacks Consensus Estimate of $6.51 billion. This estimate suggests a slight year-over-year decline of 1.8%, reflecting the broader economic pressures faced by the sector.

For non-GAAP earnings, Applied Materials has set expectations between $1.79 and $2.15 per share. The consensus among analysts, as reported by Zacks Investment Research, pegs the EPS at $1.96, indicating a modest 2% decrease from the earnings reported in the same quarter of the previous year. This stability in earnings estimates over the last 30 days, despite a slight downward adjustment of 0.3%, underscores the analysts' confidence in the company's performance amidst uncertain market conditions.

Historically, Applied Materials has demonstrated a strong track record of surpassing the Zacks Consensus Estimate for earnings, with an average earnings surprise of 9.43% over the past four quarters. This consistent performance suggests that the company might once again exceed Wall Street's expectations. The focus on the Applied Global Services segment and the ICAPS portfolio, which includes integrated circuit, advanced packaging, and services, highlights the company's strategic emphasis on high-demand semiconductor solutions, potentially driving its success in the current fiscal quarter.

The financial health and market valuation of Applied Materials are further underscored by its price-to-earnings (P/E) ratio of approximately 24.36, indicating investor willingness to pay for its earnings. The company's price-to-sales (P/S) ratio of about 6.58 and an enterprise value-to-sales (EV/Sales) ratio close to 6.55 reflect the market's valuation of its sales. With an enterprise value-to-operating cash flow (EV/OCF) ratio of around 19.81 and a debt-to-equity (D/E) ratio of about 0.33, Applied Materials showcases a balanced capital structure and strong liquidity position, as evidenced by its current ratio of roughly 2.71. These financial metrics provide a comprehensive view of the company's financial stability and market position ahead of its anticipated earnings report.

TD Cowen analysts increased their price target on Applied Materials (NASDAQ:AMAT) to $185.00 from $165.00 while reiterating their Outperform rating. Applied Materials was also added as a top pick for 2024.

The analysts noted that the company stands out because of its extensive range of products and its success in key technological advancements such as GAA, backside power, and advanced packaging. The company's valuation is also seen as particularly attractive when compared to its industry counterparts.

Additionally, the anticipated recovery in the memory sector and the sustained performance of China's less advanced technology segments are expected to positively influence the company's financial forecasts for the upcoming year.

Applied Materials (NASDAQ:AMAT), the largest semiconductor equipment manufacturer in the U.S., reported fiscal fourth-quarter earnings that surpassed expectations. However, the company's shares faced pressure intra-day today, dropping more than 5%, due to reports of a criminal investigation by the U.S. Justice Department.

According to a Reuters article, citing unnamed sources, the investigation focuses on whether Applied Materials illegally shipped equipment to Chinese chipmaker SMIC via South Korea without the necessary export licenses. The report suggests that equipment worth hundreds of millions of dollars might be involved in the case.

Despite this challenging backdrop, Applied Materials announced positive financial results. The company's adjusted diluted earnings per share (EPS) for the fourth quarter was $2.12, an increase from $2.03 in the previous year. However, their revenue saw a slight decline, dropping to $6.72 billion from $6.75 billion. These figures surpassed analyst predictions, which estimated an EPS of $1.99 on revenue of $6.52 billion. The company also experienced a rise in adjusted gross margin, which increased to 47.3% from 46% a year ago.

Looking forward, Applied Materials set its fiscal first-quarter sales projection at around $6.47 billion, with a possible variation of plus or minus $400 million. The forecast for adjusted diluted EPS ranges between $1.72 and $2.08.

Following fiscal third-quarter results that exceeded analyst predictions, Applied Materials (NASDAQ:AMAT) reported impressive earnings guidance, benefiting from the ongoing corporate competition to embrace the digital and AI era. This trend has stimulated chip demand and contributed to the company's growth. Shares gained more than 2% intra-day today.

The company posted adjusted earnings per share (EPS) of $1.90 and revenue of $6.43 billion. This outperformed the Street forecasts that anticipated an EPS of $1.74 on revenue amounting to $6.15 billion. The company's largest business segment, Semiconductor systems, experienced a slight decrease of 1.2%, generating $4.68 billion in revenue.

Applied Materials provided guidance for the fourth quarter, indicating an adjusted EPS within the range of $1.82 to $2.18. The company also projected net sales of approximately $6.51 billion, with a margin of error of around $400 million. Street estimates stood at $1.59 for EPS and $5.87 billion for net sales.

Applied Materials (NASDAQ:AMAT) reported its Q1 results on Thursday, with EPS coming in at $2.03, better than the Street estimate of $1.93. Revenue was $6.74 billion, beating the Street estimate of $6.69 billion. The company’s backlog grew again and should help support its revenue, at least through the end of fiscal 2023.

From a segment perspective, the company was particularly bullish on the strength of ICAPS (lagging edge foundry/logic), which more than offset incremental weakness in memory and leading-edge foundry/logic. But even for memory, management suggested that DRAM spending could start to recover by the end of the year.

For Q2/23, the company expects EPS to be in the range of $1.66-$2.02, compared to the Street estimate of $1.75. Revenue is expected in the range of $6-6.8 billion, compared to the Street estimate of $5.86 billion.