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Applied Materials (AMAT) to Post Q1 Earnings: What's in Store?

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Applied Materials, Inc. (AMAT - Free Report) is set to report first-quarter fiscal 2024 results on Feb 15.

For the fiscal first quarter, the company expects net sales of $6.47 billion (+/-$400 million). The Zacks Consensus Estimate for revenues is pegged at $6.47 billion, suggesting a decline of 3.95% from the year-ago quarter’s actual.

Applied Materials projects non-GAAP earnings per share of $1.72-$2.08. The Zacks Consensus Estimate for earnings is pegged at $1.90, indicating a fall of 6.4% from the year-ago quarter’s reported figure.

AMAT’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 7.7%.

Applied Materials, Inc. Price and EPS Surprise

 

Applied Materials, Inc. Price and EPS Surprise

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

Factors to Consider

AMAT’s growing 200-millimeter business and solid momentum among long-term service agreements are likely to have driven sales growth in its Applied Global Services (“AGS”) segment in the quarter under review. Strengthening of the subscription business is likely to have been another tailwind.

For first-quarter fiscal 2024, Applied Materials’ projection for AGS sales is pegged at $1.46 billion. The Zacks Consensus Estimate for the same is pegged at $1.46 billion, indicating growth of 6.6% from the year-ago quarter’s reported figure.

In addition, the improving Display and Adjacent Markets segment is expected to have continued driving top-line growth in the to-be-reported quarter.

For first-quarter fiscal 2024, the company anticipates Display sales of $235 million. The Zacks Consensus Estimate for the same is pegged at $235 million, indicating growth of 40.7% from the year-ago quarter’s actual.

Coming to the Semiconductor Systems segment, strength in the IoT, Communications, Auto, Power and Sensors portfolio is expected to have been beneficial.

However, softness in leading-edge foundry logic and NAND are anticipated to have been a major concern. Also, weakening market conditions are expected to have been concerning. Softness in demand for consumer electronics and sluggish memory spending are likely to have been headwinds.

The impacts of all these factors are expected to get reflected in the Semiconductor Systems Group sales. For first-quarter fiscal 2024, the company’s sales projection for the segment stands at $4.7 billion. The Zacks Consensus Estimate for the same is pegged at $4.705 billion, indicating a decline of 8.9% from the year-ago quarter’s reported number.

What Our Model Says

Our proven model does not conclusively predict 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.

Applied Materials has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks that you may consider, as our model shows that these have the right combination of elements to beat on earnings this time around.

Shopify (SHOP - Free Report) has an Earnings ESP of +1.02% and flaunts a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.

Shopify is set to announce fourth-quarter 2023 results on Feb 13. The Zacks Consensus Estimate for SHOP’s earnings is pinned at 31 cents per share, suggesting growth from the year-ago quarter’s reported figure of 7 cents.

Duolingo (DUOL - Free Report) has an Earnings ESP of +22.09% and currently sports a Zacks Rank #1.

Duolingo is set to announce fourth-quarter 2023 results on Feb 28. The Zacks Consensus Estimate for DUOL’s earnings is pinned at 17 cents per share, indicating growth from the year-ago quarter’s reported loss of 35 cents.

Akamai Technologies (AKAM - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3 at present.

Akamai Technologies is scheduled to release fourth-quarter 2023 results on Feb 13. The Zacks Consensus Estimate for AKAM’s earnings is pegged at $1.59 per share, suggesting a jump of 16.1% from the prior-year quarter’s actual.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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