Why Applied Materials Earnings Are So Great Despite Friday’s Headwinds?

By Chris Lange Updated Jan 30, 8:39PM EST · Published May 17, 8:45AM EDT

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Why Applied Materials Earnings Are So Great Despite Friday’s Headwinds? — © appliedmaterials.com

Applied Materials Inc. (NASDAQ: AMAT | AMAT Price Prediction) released its fiscal second-quarter financial results after the markets closed on Thursday. The company said that it had $0.70 in earnings per share (EPS) and $3.54 billion in revenue, compared with consensus estimates that called for $0.66 in EPS and $3.48 billion in revenue. The same period of last year reportedly had EPS of $1.19 on $4.57 billion in revenue.

During the most recent quarter, net revenues had dropped about 23% year to date. The company noted a gross margin of 43.5%, down from 45.9% in the same period of last year.

The company returned $814 million to shareholders, including $625 million in share repurchases and dividends of $189 million. As announced on March 8, the board of directors approved a 5% increase in the quarterly cash dividend to $0.21 from $0.20 per share.

Looking ahead to the fiscal third quarter, the company expects to see EPS in the range of $0.67 to $0.75 and net sales of $3.525 billion, give or take $150 million. The consensus estimates are $0.69 in EPS and $3.51 billion in revenue for the quarter.

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Gary Dickerson, president and CEO, commented:

In the second fiscal quarter Applied Materials delivered results toward the top-end of our guidance range, reflecting solid execution across the company in a business environment that remains challenging. Looking ahead, we maintain a positive view of our markets as powerful new demand drivers for semiconductors and displays take shape, creating tremendous opportunities for Applied Materials.

Shares of Applied Materials closed Thursday at $41.66, in a 52-week range of $28.79 to $53.23. The consensus price target is $47.75. Following the announcement, the stock was up about 3% at $42.80 in early trading indications Friday.

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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.