Applied Materials Inc, the world’s biggest semiconductor manufacturing equipment supplier, on Thursday predicted revenue and profit might surpass estimates, banking on increased business from chipmakers upgrading their equipment and stronger demand from companies that produce flat-panel screens.
Revenue in the company’s fiscal fourth quarter ending in October will rise 15 to 19 percent from the previous period, indicating sales might increase to as much as US$3.36 billion, California-based Applied Materials said in a statement.
That compares with an average estimate by analysts of US$2.86 billion, according to data compiled by Bloomberg.
Profit, excluding certain costs, will be US$0.61 to US$0.69 per share, the company said.
Analysts on average projected US$0.48 per share.
Applied Materials’ fiscal third-quarter profit was US$505 million, or US$0.46 per share, compared with US$329 million, or US$0.27 per share, in the previous year.
Revenue in the period rose 13 percent to US$2.82 billion, the company said.
The company’s earnings and predictions are used by investors as an indicator of confidence in future sales across the electronics industry.
While there is little evidence of a surge in demand for computers or mobile phones driving chipmakers to expand their factories’ capacity, they are being forced to spend on more advanced production techniques to remain competitive.
Applied Materials got US$3.66 billion in orders in the third quarter, an increase of 26 percent.
The display equipment division, whose machinery is used by companies such as Samsung Electronics Co to supply screens to customers such as Apple Inc, received orders of US$803 million, Applied Materials said.
Semiconductor systems won orders of US$2.2 billion, an increase from the preceding quarter and the same period a year earlier, it said. Outsourced manufacturers of chips, or foundries, contributed 57 percent of that total.
“This is not an industry story, it’s an Applied Materials story,” chief executive officer Gary Dickerson said in a telephone interview.
The company’s earnings and orders are not being lifted by a surge in demand for products that need semiconductors and displays, he said. Instead, semiconductor and display makers are upgrading to new production techniques as the existing ones reach their limits.
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