(Bloomberg) – Applied Materials Inc. gave a bullish forecast for the current period on increasing orders for equipment used by computer chip makers.
The company Santa Clara, in California, is the largest manufacturer of machines used to produce chips, the most important parts of the electronics business chain. Customers include Samsung Electronics Co., Taiwan Semiconductor Manufacturing Co. and Intel Corp. Chip equipment takes months to make and even longer to install and test and test in production lines that cost billions of dollars, making the results and applications of applied materials important early indicators of future demand in the electronics sector.
Key Insights
Revenue in the fiscal fourth quarter will be about $ 4.6 billion, the company said Thursday in a statement. Analysts, on average, estimate $ 4.36 billion, according to data compiled by Bloomberg.Profit, on an adjusted basis, will be $ 1.11 to $ 1.23 per share over the three-month period ending in October, said Applied Materials. That compares with an average estimate of $ 1.02. Net fiscal revenue in the third quarter was $ 841 million, or 91 cents per share, compared to $ 571 million, or 61 cents per share, a year earlier, the company said. Revenue rose 23% to $ 4.4 billion in the period ended July 26. Analysts sought $ 4.18 billion. Adjusted profit was $ 1.06 a share per quarter compared to analysts’ average estimate of 95 cents.
Executive remarks
The company predicts that spending on chip-making equipment will increase this year and that growth will continue next year. “The demand for semiconductor equipment is intensifying,” Chief Executive Officer Gary Dickerson said in a conference call with analysts. “Based on what we hear from our customers, we believe growth will continue in 2021.” Applied Materials works at pre-Covid levels of productivity, he said. The company may increase its profitability to previous historic highs over time, Chief Financial Officer Dan Durn, analysts said.
Action response
Shares gained about 3.3% in extended trading. The stock closed at $ 65.07 in New York, up 6.6% this year.
More information
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(Updates section for executive comments, share price move)
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