Applied Materials profit forecasts match estimates


Sat, Nov 16, 2013 - Page 15

Applied Materials Inc, the largest supplier of semiconductor-manufacturing equipment, forecast fiscal first quarter sales and profit that were in line with estimates amid rising machinery orders from contract chipmakers.

Revenue in the current period will climb 3 percent to 10 percent from the prior quarter, the company said in a statement on Thursday, indicating a range of US$2.05 billion to US$2.19 billion. Profit before certain costs will be US$0.20 to US$0.24 a share.

On average, analysts projected sales of US$2.19 billion and profit of US$0.23, according to data compiled by Bloomberg.

Applied Materials is benefiting from an increase in demand from companies such as Taiwan Semiconductor Manufacturing Co (台積電) that build semiconductors for other chipmakers, as they upgrade plants for new production processes.

While chip-equipment orders — an indication of future sales — are growing, bookings slipped in the company’s display division, which makes machinery used to produce flat-panel screens.

“Display is trending weaker, but semiconductor is trending fine,” said Edwin Mok, an analyst at Needham & Co in San Francisco.

“Orders came a little bit weaker, but it was mostly display” that held them back, he added.

Applied Materials’ net income in the fourth quarter, which ended on Oct. 27, was US$183 million, or US$0.15 a share, compared with a loss of US$515 million, or US$0.42, a year earlier, the company said.

Excluding some costs, profit was US$0.19. Revenue climbed 21 percent to US$1.99 billion, the first year-over-year increase since 2011.

On average, analysts had predicted profit of US$0.18 of sales of US$1.97 billion.

Chief executive officer Gary Dickerson said in a telephone interview that next year will be a good year for the display business.

Larger screens in smartphones, bigger televisions and the introduction of curved displays will drive demand for screen machinery, Dickerson said.

Industrywide spending on equipment for chip plants will grow 10 percent to 20 percent next year, he said.