| | | Applied Materials Announces Fourth Quarter and Fiscal Year 2019 Results
GLOBENEWSWIRE 4:01 PM ET 11/14/2019
Symbol Last Price Change | AMAT | 56.96 | -0.16 (-0.28%) | | QUOTES AS OF 04:00:01 PM ET 11/14/2019 |
Quarterly revenue of $3.75 billion Quarterly GAAP EPS of $0.75 and non-GAAP EPS of $0.80 Returns $3.17 billion to shareholders in fiscal 2019 SANTA CLARA, Calif., Nov. 14, 2019 (GLOBE NEWSWIRE) -- Applied Materials, Inc.(AMAT) today reported results for its fourth quarter and fiscal year ended Oct. 27, 2019.
Fourth Quarter Results
Applied generated revenue of $3.75 billion. On a GAAP basis, the company recorded gross margin of 43.5 percent, operating income of $864 million or 23.0 percent of net sales, and earnings per share (EPS) of $0.75.
On a non-GAAP adjusted basis, the company reported gross margin of 43.8 percent, operating income of $888 million or 23.7 percent of net sales, and EPS of $0.80.
The company returned $694 million to shareholders including $500 million in share repurchases and dividends of $194 million.
Full Year Results
In fiscal 2019, Applied generated revenue of $14.61 billion. On a GAAP basis, the company recorded gross margin of 43.7 percent, operating income of $3.35 billion or 22.9 percent of net sales, and EPS of $2.86.
On a non-GAAP adjusted basis, the company reported gross margin of 44.0 percent, operating income of $3.43 billion or 23.5 percent of net sales, and EPS of $3.04.
The company generated $3.25 billion in cash from operations, paid dividends of $771 million and used $2.40 billion to repurchase 60 million shares of common stock.
“Applied Materials’ fourth quarter results reflect a healthy uptick in demand for semiconductor equipment, combined with strong execution across the company,” said Gary Dickerson, president and CEO. “The semiconductor industry is increasingly adopting a new playbook for improving chip performance, power, area and cost, and we are investing in unique solutions to enable our customers’ success in the AI-Big Data era.”
Results Summary
| | | | | | | | | Change | | | Q4 FY2019 | | Q4 FY2018 | | FY2019 | | FY2018 | Q4 FY2019
vs.
Q4 FY2018 | | FY2019
vs.
FY2018 | | | (In millions, except per share amounts and percentages) | | Net sales | $ | 3,754 | | $ | 3,759 | | $ | 14,608 | | $ | 16,705 | — | % | | (13 | )% | | Gross margin | 43.5% | | 44.1% | | 43.7% | | 45.0% | (0.6) points | | (1.3) points | | Operating margin | 23.0% | | 23.7% | | 22.9% | | 26.9% | (0.7) points | | (4.0) points | | Net income | $ | 698 | | $ | 757 | | $ | 2,706 | | $ | 3,038 | (8 | )% | | (11 | )% | | Diluted earnings per share | $ | 0.75 | | $ | 0.77 | | $ | 2.86 | | $ | 2.96 | (3 | )% | | (3 | )% | | Non-GAAP Adjusted Results | | | | | | | | | | | | Non-GAAP adjusted gross margin | 43.8% | | 45.3% | | 44.0% | | 46.1% | (1.5) points | | (2.1) points | | Non-GAAP adjusted operating margin | 23.7% | | 25.1% | | 23.5% | | 28.1% | (1.4) points | | (4.6) points | | Non-GAAP adjusted net income | $ | 744 | | $ | 837 | | $ | 2,875 | | $ | 4,294 | (11 | )% | | (33 | )% | | Non-GAAP adjusted diluted EPS | $ | 0.80 | | $ | 0.85 | | $ | 3.04 | | $ | 4.18 | (6 | )% | | (27 | )% | Applied adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASC 606), as of the first day of fiscal 2019 using the full retrospective method. Applied also adopted Accounting Standards Update 2017-07, Compensation—Retirement Benefits, as of the first day of fiscal 2019 using the retrospective method. All prior periods included in the unaudited consolidated condensed balance sheet as of Oct. 28, 2018, and the unaudited consolidated condensed statements of operations and cash flows for the three and twelve months ended Oct. 28, 2018, were restated under the new standards.
A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also “Use of Non-GAAP Adjusted Financial Measures” section.
Business Outlook
In the first quarter of fiscal 2020, Applied expects net sales to be approximately $4.10 billion, plus or minus $150 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $0.87 to $0.95.
This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions of $0.01 per share and includes net income tax benefit related to intra-entity intangible asset transfers of $0.03 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.
Fourth Quarter and Fiscal Year Reportable Segment Information
| Semiconductor Systems | Q4 FY2019 | | Q4 FY2018 | | FY2019 | | FY2018 | | | (In millions, except percentages) | | Net sales | $ | 2,302 | | $ | 2,246 | | $ | 9,027 | | $ | 10,577 | | Foundry, logic and other | 58% | | 40% | | 52% | | 36% | | DRAM | 21% | | 26% | | 22% | | 27% | | Flash | 21% | | 34% | | 26% | | 37% | | Operating income | 641 | | 594 | | 2,464 | | 3,441 | | Operating margin | 27.8% | | 26.4% | | 27.3% | | 32.5% | | Non-GAAP Adjusted Results | | | | | | | | Non-GAAP adjusted operating income | $ | 652 | | $ | 640 | | $ | 2,507 | | $ | 3,624 | | Non-GAAP adjusted operating margin | 28.3% | | 28.5% | | 27.8% | | 34.3% |
| Applied Global Services | Q4 FY2019 | | Q4 FY2018 | | FY2019 | | FY2018 | | | (In millions, except percentages) | | Net sales | $ | 977 | | $ | 976 | | $ | 3,854 | | $ | 3,754 | | Operating income | 274 | | 288 | | 1,101 | | 1,102 | | Operating margin | 28.0% | | 29.5% | | 28.6% | | 29.4% | | Non-GAAP Adjusted Results | | | | | | | | Non-GAAP adjusted operating income | $ | 274 | | $ | 289 | | $ | 1,101 | | $ | 1,104 | | Non-GAAP adjusted operating margin | 28.0% | | 29.6% | | 28.6% | | 29.4% |
| Display and Adjacent Markets | Q4 FY2019 | | Q4 FY2018 | | FY2019 | | FY2018 | | | (In millions, except percentages) | | Net sales | $ | 457 | | $ | 520 | | $ | 1,651 | | $ | 2,298 | | Operating income | 96 | | 118 | | 294 | | 574 | | Operating margin | 21.0% | | 22.7% | | 17.8% | | 25.0% | | Non-GAAP Adjusted Results | | | | | | | | Non-GAAP adjusted operating income | $ | 99 | | $ | 122 | | $ | 307 | | $ | 589 | | Non-GAAP adjusted operating margin | 21.7% | | 23.5% | | 18.6% | | 25.6% | Use of Non-GAAP Adjusted Financial Measures
Applied provides investors with certain non-GAAP adjusted financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including certain items related to mergers and acquisitions; restructuring charges and any associated adjustments; impairments of assets, or investments; gain or loss on sale of strategic investments; tax effect of share-based compensation; certain income tax items and other discrete adjustments. Additionally, non-GAAP results exclude estimated discrete income tax expense items associated with changes to recent U.S. tax legislation. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.
Management uses these non-GAAP adjusted financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Webcast Information
Applied Materials (AMAT) will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast will be available at www.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today. |
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