Back to top

Image: Bigstock

What's in Store for Applied Materials (AMAT) in Q1 Earnings?

Read MoreHide Full Article

Applied Materials, Inc. (AMAT - Free Report) is set to report fiscal first-quarter 2021 results on Feb 18. In the last-reported quarter, it delivered an earnings surprise of 6.8%.

Applied Materials’ surprise history has been decent. The company surpassed earnings estimates in three of the trailing four quarters, while missing it once, with the average surprise being 5.7%.

For the fiscal first quarter, the Zacks Consensus Estimate for earnings has increased 0.8% to $1.27 per share over the past 30 days. The figure indicates an increase of 29.6% from the year-ago quarter.

The consensus mark for revenues is pegged at $4.95 billion, implying an increase of 19% from the year-ago reported figure.

Applied Materials, Inc. Price and EPS Surprise

Applied Materials, Inc. Price and EPS Surprise

Applied Materials, Inc. price-eps-surprise | Applied Materials, Inc. Quote

Performance in the Last Reported Quarter

In fourth-quarter fiscal 2020, earnings of $1.25 per share surpassed the Zacks Consensus Estimate by 8 cents. The figure increased 17.9% sequentially and 56.2% year over year.

Net sales of $4.69 billion surpassed the Zacks Consensus Estimate by 1.8%. Also, the figure improved 24.9% from the year-ago period.

Let’s see how things have shaped up for this announcement.

The company’s fiscal first-quarter sales are expected to have benefited from portfolio strength, growing investments in new playbook, its expanding position in memory and increasing new design wins.

Also, the company might have gained from the integration of advanced machine learning capabilities across semiconductor fabs to enhance automated defect analysis. Persistent expansion of big data and growth of new computing technologies are likely to reflect on the upcoming results.

During the quarter, the global rollout of 5G mobile technology led to higher demand for semiconductor equipment, which is expected to have aided its top-line growth.

Further, growth opportunities across specialty nodes and the new nodes ramp across foundry, logic, NAND, and DRAM are expected to have benefited Applied Materials in the to-be-reported quarter. Moreover, inventory reductions across memory and demand elasticity in NAND are likely to have acted as tailwinds.

In addition, the company’s growing research and development activities, as well as innovative next-generation products are likely to have aided the Display and Adjacent Markets segment’s performance in the quarter under review.

However, uncertainties related to the COVID-19 pandemic could impact its upcoming results.

What Our Model Says

Our proven model predicts an earnings beat for Applied Materials this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of +2.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Applied Materials has a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in their upcoming releases.

Rocket Companies, Inc. (RKT - Free Report) has an Earnings ESP of +3.12% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Workday, Inc. (WDAY - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #2.

Lattice Semiconductor Corporation (LSCC - Free Report) has an Earnings ESP of +2.94% and holds a Zacks Rank of 3.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

 

Published in