=DJ UPDATE: Applied Materials 3Q Results Surpass Expectations
08/15/2006
Dow Jones News Services
(Copyright © 2006 Dow Jones & Company, Inc.)
By Andrew Simons
Of DOW JONES NEWSWIRES
LOS ANGELES (Dow Jones)--Applied Materials Inc. (AMAT), a chip equipment maker, surpassed Wall Street's expectations for the chip equipment maker's third-quarter financial results after the market's close Tuesday.
Shares were up 2% to $16.01 in after-hours trading Tuesday.
Applied Materials third-quarter earnings rose to $512 million, or 33 cents a share, from year-earlier earnings of $369.6 million, or 23 cents a share.
Sales at the Santa Clara, Calif., company rose to $2.54 billion from $1.63 billion.
On a non-GAAP basis, earnings for the quarter were 35 cents a share.
Analysts, according to Thomson First Call, expected the company to post earnings for the third quarter of 30 cents a share on sales of about $2.44 billion.
Results were helped by a $34 million tax benefit, or $0.02 per share, the company said.
Orders for new equipment increased 7% to $2.67 billion, in line with what analysts had expected from the company.
"This quarter's strong results demonstrated Applied's market leadership with continued growth in orders, revenue and profitability," said Mike Splinter, the company's president and chief executive, in a statement.
"Broad-based demand for Applied Materials' nanomanufacturing technology solutions and improved market position in key product areas increased revenue. Improved profitability was driven by higher utilization of our factory, lower cycle times and other margin improvement programs.
The company didn't provide any outlook in its press release about the company's outlook. Analysts have said they expect demand for the rest of 2006 to be strong followed by a period of weakening demand next year.
Last month, a string of semiconductor products companies indicated business would slow in the coming quarters.
Last month, Boston-based Teradyne Inc. (TER) offered the most explicit warning, saying that it expects third-quarter earnings of 17 cents to 24 cents a share on revenue of $340 million to $370 million, below second-quarter results and Wall Street forecasts for 25 cents a share on revenue of $372.8 million.
"It's impossible to extrapolate monthly demand fluctuations...but there's enough short-term evidence that there should be a pause in buying this quarter," Teradyne Chief Executive Mike Bradley said during a conference call in July.
Chip giant Intel Corp. (INTC) added to the pessimism reporting a weak second quarter, lowering its outlook for the remainder of the year and saying it is seeing an increase in inventories.
By Andrew Simons, Dow Jones Newswires; 323-658-3874;
andrew.simons@dowjones.com