Applied Materials Beats Estimates and Guidance in Stride

Applied Materials, Inc. (NASDAQ: AMAT) reported fiscal second-quarter financial results after the markets closed on Thursday. The company had $0.34 in earnings per share (EPS) on $2.45 billion in revenue compared to consensus estimates from Thomson Reuters that called for $0.32 in EPS on $2.43 billion in revenue. The same period from last year had $0.29 in EPS on $2.44 billion in revenue.

Second quarter orders totaled $3.45 billion, up 52% sequentially and up 37% from the same period last year. Backlog increased by 34% to $4.17 billion.

During the quarter the company returned $113 million to shareholders in the form of dividends and $900 million in share repurchases (45 million shares of common stock).

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In terms of fiscal third quarter guidance, the company expects to see net sales increase by 14% to 18% and EPS to be in the range of $0.46 to $0.50. There are consensus estimates that call for $0.36 in EPS on $2.51 billion in revenue for the coming quarter.

Gary Dickerson, President and CEO of Applied Materials, commented:

In our second quarter we booked our highest orders in 15 years and we expect to deliver record earnings in fiscal 2016. We are making significant progress with our strategy in semiconductor, display and service, and have a great pipeline of differentiated products that will fuel future growth.

The company generated $81 million in cash from operations during this quarter. On the books the company had cash, cash equivalents, and short-term investments totaling $2.64 billion compared to $4.97 billion at the end of the previous fiscal year.

Shares of Applied Materials closed Thursday at $19.91, with a consensus analyst price target of $23.25 and a 52-week trading range of $14.25 to $21.67. Following the release of the earnings report, the stock was initially up about 4% at $20.68 in the after-hours trading session.