Why This Is the Best Quarter Applied Materials Has Ever Had

By Chris Lange Updated Jan 12, 9:01AM EST · Published Aug 17, 4:25PM EDT

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Why This Is the Best Quarter Applied Materials Has Ever Had — © Thinkstock

Applied Materials, Inc. (NASDAQ: AMAT) reported fiscal third-quarter financial results after markets closed Thursday. The general consensus after seeing these results is that Applied Materials had its best quarter in the history of the company, hitting both record earnings and record revenues among other highlights.

The company said that it had $0.86 in earnings per share (EPS) and $3.74 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.84 in EPS and $3.69 billion in revenue. The same period from last year had $0.50 in EPS and $2.82 billion in revenue.

During the quarter, Applied Materials grew net sales by 33% and increased gross margin by 3.1 points to 45.4%. Not to mention the company also grew operating margin by 6.2 points to 27.3%.

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In terms of the outlook for the fourth quarter, management expects to see EPS in the range of $0.86 to $0.94 and revenues in the range of $3.85 billion to $4.0 billion. There are consensus estimates calling for $0.82 in EPS and $3.71 billion in revenue for the coming quarter.

On the books, cash, cash equivalents, and short-term investments totaled $7.23 billion at the end of the quarter, compared with $3.75 billion at the end of the previous fiscal year.

Gary Dickerson, President and CEO, commented:

With revenue and profits at all-time highs, Applied has tremendous momentum and a very positive outlook for the future. Our markets are growing with a broader set of demand drivers, and the breadth of Applied’s technology enables us to play a larger and more valuable role advancing the innovation roadmap in semiconductor and display.

Shares of Applied Materials closed Thursday down 3% at $43.12, with a consensus analyst price target of $52.23 and a 52-week range of $27.00 to $47.86. Following the release of the earnings report, the stock was initially up over 3% at $44.50 in the after-hours trading session.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.