With statements like this I will be careful to be short of SOX or semis..
Applied Materials Inc. (Nasdaq:AMAT - news) on Tuesday reported its third-quarter profit more than tripled to $244.4 million, far surpassing analyst forecasts, as sales at the world's largest maker of semiconductor equipment surged 62 percent.his is according to Reuters report..
Applied Materials said its earnings per share for the period ending Aug. 1 jumped to 61 cents from 19 cents, or $70.6 million, trouncing the consensus forecast of 53 cents per share compiled by the research firm First Call/Thomson Financial. After certain one-time items, last year's net income totaled $47.5 million, or 13 cents per share.
Sales rose to $1.43 billion from $884 million a year ago and jumped 28 percent from the $1.12 billion logged in the second quarter. New orders in the quarter increased 140 percent to a record $1.46 billion from $608 million a year ago and climbed 5 percent from $1.39 billion in the second quarter.
The results from Applied confirm that the semiconductor industry is rebounding from its worst slump ever, which was sparked by the Asian economic crisis that began in July 1997 and a glut of certain types of semiconductors.
``The fundamentals are in placed for sustained global growth and we are in the early stages of a multiyear growth cycle,' Applied Materials Chairman James Morgan told investors and analysts on a conference call. ``There continues to be a lot of opportunity out there.'
Its stock climbed $1.25 to close at $71.75 on the Nasdaq, far above its year-low of $21.56. The company reported the results after the close of regular U.S. trading. In trading after the close, Applied stock eased to $70.
Reflecting the growth in telecommunications, such as wireless services, and the growth of the Internet, Applied said the semiconductor equipment industry could double during the next five years. Morgan said the chip-equipment industry could grow to $32 billion by 2003.
Looking to the fourth quarter, Santa Clara, Calif.-based Applied said orders will increase from the third quarter and that revenue should rise to about $1.475 billion. Gross margin, or the percentage of revenue remaining after subtracting product costs, is targeted for the high 40-percent range.
In the third quarter, gross margin was 48.7 percent, the highest it has been this decade, Applied executives said.
Also contributing to growth, Morgan said, are new materials such as copper from which newer chips are being made, the move to larger silicon wafers -- the raw material from which semiconductors are made -- and the acceleration of Moore's Law.
Moore's Law, discovered by Intel Corp. (Nasdaq:INTC - news) co-founder Gordon Moore, stipulates that semiconductors double in the number of transistors they have and also become smaller every 18 months.
Large chip companies such as Intel, the world's largest, have said that they expect a strong second half of the year for personal computer sales, which includes the back-to-school and holiday selling seasons.
Other chip equipment stocks, such as Novellus Corp. (Nasdaq:NVLS - news), Lam Research Corp. (Nasdaq:LRCX - news) and ASM Lithography Holdings (Nasdaq:ASML - news) have seen their shares surge from year lows amid optimism for a rebound in the highly cyclical global semiconductor industry.
``Virtually every industry in the world is creating demand for our industry and for Applied Materials' products,' Morgan said. |
