From Briefing.com: 08:18 am Applied Materials (AMAT)
20.97: Applied Materials not only beat first quarter earnings projections on greater than 20% order growth, but guided up second quarter projections as well, indicating greater cycle strength. It now sees orders up 15-20%, an increase from its previous estimate of 7-10%. Revenues are expected to rise 13-15% sequentially with earnings in a range of 22-23 cents per share. Pro forma earnings for Q1 were 19 cents per share - two cents ahead of expectations with revenues also coming in ahead, up 4.3% year/year to $1.86 bln. The Santa Clara-based company enjoyed broad-based strength by product and by geographical region for high volume production and leading edge 65nm and 45nm chip development programs.
Applied Materials' earnings and guidance continues to support our positive stance on the semiconductor capital equipment industry in 2006. The stock has lagged its global peers, but we would expect this variance to narrow. Supportive factors for solid a spending cycle include rising capex plans by top five global buyers, including IDMs, and what we view as good barometers for the entire industry, the Taiwanese foundries. Both United Microelectronics (UMC) and Taiwan Semiconductor (TSM) reported record revenues and higher utilization rates in the fourth quarter. We expect these companies will increase capex in the first half of the year due to tight utilization of advanced process technologies.
--Kimberly DuBord, Briefing.com
08:15 am Hewlett-Packard (HPQ)
31.67: Hewlett-Packard has done a lot of heavy lifting after Mark Hurd took over in March. The company has rapidly restructured its businesses, the benefits of which have come to fruition much faster than many on Wall Street expected. The street is playing catch-up this morning after the company reported pro forma earnings rose 30% to $0.48 per share - four cents ahead of expectations. Revenues grew by almost 6% to $22.7 bln driven by broad-based portfolio strength.
The world's largest printer maker's PC and printing units drove the upside, sending shares higher in the after-hours. PC profits doubled to $293 mln on an 8.4% increase in sales, highlighted by a 26% jump in notebooks, widening profit margins by 180 basis points year/year to 3.9%. Hewlett's strong quarter and raised Q2 guidance sets the stage for its main rival, Dell Computer (DELL), which releases results tonight after the close. With its competitor now clearly back in the game, Dell's guidance will be critical in the outlook for the PC market.
--Kimberly DuBord, Briefing.com
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