We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Applied Materials Inc.’s (AMAT - Free Report) reported mixed third quarter fiscal 2016 results, wherein the bottom line came ahead of the Zacks Consensus Estimate but the top line fell short of the same.
The company’s pro-forma earnings per share (EPS) of 50 cents in the third quarter beat the Zacks Consensus Estimate of 47 cents and came in at the higher end of the guided range.
Quarter Detail
The company reported revenues of $2.82 billion, up 15.1% sequentially and 13.3% year over year primarily driven by strong demand in Southeast Asia, Korea, Japan and China and partially offset by soft demand in Taiwan, Europe and the U.S. However, revenue fell short of the Zacks Consensus Estimate of $2.831 billion.
Total orders of $3.66 billion were up 26% year over year. Backlog for the quarter increased 60% year-over-year to $4.95 billion.
Applied Materials generated non-GAAP gross margin of 43.7%, up 100 basis points (bps) from the previous quarter’s margin of 42.7% but down 20 bps from 43.9% reported in the year-ago quarter.
The company reported adjusted operating margin of 22.8% which marked an increase of 360 bps sequentially and 200 bps year over year.
On a pro-forma basis, Applied Materials reported net income of $550 million, or 50 cents per share compared with $376 million or 34 cents in the prior quarter. In the year-ago quarter, Applied Materials had reported a net income of $410 million or 33 cents per share.
Our pro-forma calculation excludes restructuring, acquisition-related, impairment and other charges as well as tax adjustments in the reported quarter.
On a fully diluted GAAP basis, the company recorded a net profit of $505 million (46 cents per share) compared with $320 million (29 cents per share) in the previous quarter and $329 million (27 cents per share) a year ago.
Inventories increased to $2.03 billion from $1.92 billion in the second quarter. Accounts receivables decreased to $1.85 billion from $1.91 billion in the prior quarter.
Cash and short-term investments balance was $3.27 billion at the end of fiscal second quarter compared with $2.64 billion in the prior quarter. Goodwill was 24.1% of total assets.
During the quarter, the company generated $981 million in cash from operations. The company spent $50 million on capex and paid dividends worth $108 million. It used $196 million towards share repurchases.
Guidance
Applied Materials also provided guidance for the fourth quarter of fiscal 2016. Revenues are expected to increase 15–19 percentage points sequentially. Non-GAAP EPS is expected to come in a range of 61 cents to 69 cents.
Applied Materials currently has a Zacks Rank #3 (Hold).
Better-ranked stocks include in the broader technology sector Charter Communications, Inc. (CHTR - Free Report) , Netgear Inc. (NTGR - Free Report) and Radcom Ltd. (RDCM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Applied Materials (AMAT) Q3 Earnings Beat Estimate
Applied Materials Inc.’s (AMAT - Free Report) reported mixed third quarter fiscal 2016 results, wherein the bottom line came ahead of the Zacks Consensus Estimate but the top line fell short of the same.
The company’s pro-forma earnings per share (EPS) of 50 cents in the third quarter beat the Zacks Consensus Estimate of 47 cents and came in at the higher end of the guided range.
Quarter Detail
The company reported revenues of $2.82 billion, up 15.1% sequentially and 13.3% year over year primarily driven by strong demand in Southeast Asia, Korea, Japan and China and partially offset by soft demand in Taiwan, Europe and the U.S. However, revenue fell short of the Zacks Consensus Estimate of $2.831 billion.
Total orders of $3.66 billion were up 26% year over year. Backlog for the quarter increased 60% year-over-year to $4.95 billion.
Applied Materials generated non-GAAP gross margin of 43.7%, up 100 basis points (bps) from the previous quarter’s margin of 42.7% but down 20 bps from 43.9% reported in the year-ago quarter.
The company reported adjusted operating margin of 22.8% which marked an increase of 360 bps sequentially and 200 bps year over year.
On a pro-forma basis, Applied Materials reported net income of $550 million, or 50 cents per share compared with $376 million or 34 cents in the prior quarter. In the year-ago quarter, Applied Materials had reported a net income of $410 million or 33 cents per share.
Our pro-forma calculation excludes restructuring, acquisition-related, impairment and other charges as well as tax adjustments in the reported quarter.
On a fully diluted GAAP basis, the company recorded a net profit of $505 million (46 cents per share) compared with $320 million (29 cents per share) in the previous quarter and $329 million (27 cents per share) a year ago.
APPLD MATLS INC Price, Consensus and EPS Surprise
APPLD MATLS INC Price, Consensus and EPS Surprise | APPLD MATLS INC Quote
Balance Sheet
Inventories increased to $2.03 billion from $1.92 billion in the second quarter. Accounts receivables decreased to $1.85 billion from $1.91 billion in the prior quarter.
Cash and short-term investments balance was $3.27 billion at the end of fiscal second quarter compared with $2.64 billion in the prior quarter. Goodwill was 24.1% of total assets.
During the quarter, the company generated $981 million in cash from operations. The company spent $50 million on capex and paid dividends worth $108 million. It used $196 million towards share repurchases.
Guidance
Applied Materials also provided guidance for the fourth quarter of fiscal 2016. Revenues are expected to increase 15–19 percentage points sequentially. Non-GAAP EPS is expected to come in a range of 61 cents to 69 cents.
Applied Materials currently has a Zacks Rank #3 (Hold).
Better-ranked stocks include in the broader technology sector Charter Communications, Inc. (CHTR - Free Report) , Netgear Inc. (NTGR - Free Report) and Radcom Ltd. (RDCM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>