Friday July 10 5:31 PM ET
Applied Materials warns
After the market closed Friday, Applied Materials (Nasdaq: AMAT) said that it expects its ongoing earnings of between 15
and 18 cents per diluted share for its third fiscal quarter, below analysts' expectations of 21 cents.
Applied Materials said it also expects new orders of $600 million to $675 million, and net sales of $850 million to $885 million
for the quarter.
The ongoing earnings forecast excludes an estimated $25 million to $30 million restructuring charge, approximately 5 cents per
share after-tax, associated with a voluntary separation plan announced by the company in May.
Applied Materials said it will release its financial results for the third fiscal quarter on Aug. 11.
Explaining the anticipated lower-than-expected results, Applied Materials said its customers are "delaying orders, rescheduling
equipment deliveries and reducing spending on wafer fabrication support as they evaluate the impacts of difficult economic
conditions in Asia, DRAM overcapacity and weaker than expected PC sales, compounded by a movement to lower-priced
(sub $1,000) PCs."
Although these factors have been present for some time, their near-term effect on the semiconductor equipment industry "will
be more severe than previously anticipated," Applied Material said.
Customers are also seeking to assess new products and technology. Fortunately, Applied Materials said it is able to address
these requirements with its new families of products.
However, even with these opportunities, the company's new orders for the third and fourth fiscal quarters of 1998 will be
significantly lower than the $1.03 billion achieved for the second fiscal quarter.
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