Earnings Preview: Applied Materials (AMAT)

On Tuesday afternoon, we’ll get to see earnings out of Applied Materials Inc. (NASDAQ: AMAT). The estimates from First Call for the semiconductor manufacturer $2.01 billion in revenues.  Estimates for fiscal October 2008 are $8.75 billion in revenues.

Analysts have an average price target north of $23.  Based upon static pricing, options are currently factoring in a price move of $0.57 to $0.66 in either direction.  That number will likely change by Tuesday afternoon.  The 50-day moving average has been a pivot point and is currently $17.80, while the 200 day moving average is $19.49.

While Wall Street might try to hang on to this closely as one of the few key tech stocks posting earnings, by now it is hard to expect any major overperformance demands from the leader in semiconductor chip equipment players.  We have already seen chip companies give their cap-ex forecasts for 2008, and that tends to lead Applied Materials’ guidance rather than Applied Materials leading the tech sector expenditure forecasts.  Maybe the company will spend more time talking up its long-term solar plans.

Applied Materials closed at $17.93 Friday and its 52-week trading range is $16.13 to $23.00.

Jon C. Ogg
February 9, 2008