Applied Materials Inc, the biggest maker of semiconductor equipment, said fiscal second-quarter profit fell and third-quarter results will miss forecasts because chipmakers are ordering fewer tools.
Profit from operations for the period ended April 29 fell to USUS$269 million, or 32 cents a share, from net income of USUS$468.9 million, or 54 cents, a year earlier. Sales fell 13 percent to US$1.91 billion from US$2.19 billion. Orders dropped 54 percent to US$1.35 billion from US$2.93 billion.
Per-share profit in the current quarter will be break-even or slightly higher, falling short of analyst estimates for profit of 22 cents. Demand for Applied's equipment is slumping because of lackluster sales of personal computers, cell phones and other devices that run on chips. The company has been reducing expenses to cope with the slowdown.
"This downturn is the steepest and sharpest cutback in spending we've ever seen," Chairman Jim Morgan said on a conference call. "I believe we're at the bottom."
The company was expected to have profit of US$0.33 a share in the recent quarter, the average forecast of analysts polled by First Call. Including a US$58 million pretax charge for restructuring and closing some plants, Applied said net income in the recent quarter was US$226.7 million, or US$0.27 a share.
The company reduced its workforce by 10 percent during the quarter to 20,000 from 22,000, said Chief Financial Officer Joe Bronson.
Applied said it will trim expenses further. Salaries will be cut as much as 15 percent for top executives and 1.5 percent for other workers, Morgan said.
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