8/9....AMAT...Profits Breeze Past Forecasts
By Duncan Martell
PALO ALTO, Calif. (Reuters) - Applied Materials Inc., the No. 1 maker of semiconductor manufacturing equipment, on Wednesday reported fiscal third-quarter profits that breezed past expectations, paced by an 83-percent surge in sales.
For the period ended July 30, Applied (NasdaqNM:AMAT - news) said that net income more than doubled to $603.8 million, or 70 cents a share, from profit from operations of $256.1 million, or 31 cents a share, a year ago. Sales rose to $2.73 billion from $1.49 billion.
There were no one-time items in the just-completed quarter. Applied also said that orders hit a record $3.28 billion.
On that basis, the results topped the consensus analyst forecast of 68 cents a share, according to First Call/Thomson Financial, which tracks such figures.
Applied is benefiting from a surge in demand for semiconductors amid booming growth of the Internet, computer networks, mobile phones and wireless devices. While some analysts have argued that the semiconductor industry is slowing after just two years of rebounding, Applied's results appear to belie that notion.
``At least talking to the customer, they anticipate continued investment next year,'' said James Morgan, Applied's chairman and chief executive in an interview. ``There's just a huge explosion in demand for different types of chips.''
He predicted that demand will continue to rise into next year.
Executives of Santa Clara, Calif.-based Applied said on the call that demand was strong across all regions for nearly all of its products. Demand has also been strong, they said, for its machines that make chips from 12-inch-diameter silicon wafers, larger than the current 8-inch wafers the industry uses.
Chip companies at last are committing the billions of dollars necessary to build and upgrade existing chip factories with the multimillion dollar equipment. During the third quarter, Applied introduced 22 different systems that cover 75 percent of the chipmaking process.
``Japan has picked up finally and that's been good and really we had a good performance across the product lines,'' Morgan said.
Others, including Novellus Systems Inc., which last month reported second-quarter results that easily topped analyst forecasts, and Lam Research Corp. and others have introduced systems of next-generation chipmaking equipment.
Applied said fourth-quarter sales should be in the range of $2.85 billion to $2.9 billion, excluding machines that use the larger wafers. Orders will exceed $3.5 billion and earnings per share will be 73 cents to 75 cents a share. Gross margin will also rise from the 50.1 percent registered in the third quarter.
In the year-ago period, including one-time items, Applied had net income of $238.3 million, or 29 cents a share. There were special adjustments for its flat-panel business and its acquisition of E-Tek during that quarter.
Shares of Applied rose 1-9/16 to 72-1/8 on the Nasdaq. The stock has risen 11.4 percent so far this year and has risen 89 percent in the last 12 months.
``Most of the economies are making progress around the world,'' Morgan said. ``This Internet and Information Age and applications are exploding.'' |
