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AMAT Q4 Earnings Beat: Will Dim Sales Guidance Pull the Stock Down?
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Applied Materials (AMAT - Free Report) ended fourth-quarter fiscal 2024 on a strong note by reporting better-than-expected results. Fourth-quarter non-GAAP earnings of $2.32 per share surpassed the Zacks Consensus Estimate by 6.4% and improved 9% year over year.
AMAT’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 7.5%.
Applied Materials’ fourth-quarter fiscal 2024 revenues of $7.05 billion surpassed the consensus mark by 1.52%. The top line rose 5% year over year due to an impressive performance across its Semiconductor Systems and Applied Global Services (AGS) segments. Robust demand across the United States also contributed to the top-line growth.
Despite strong quarterly performance, Applied Materials issued dim revenue guidance for the first quarter of fiscal 2025. The company’s pessimistic sales outlook is likely to turn investors cautious over its near-term prospects. This could negatively impact AMAT’s share price.
Applied Materials operates through four segments namely, Semiconductor Systems, AGS, Display and Corporate & Other. Stronger-than-expected performances across Semiconductor Systems and AGS drove the top line.
Semiconductor Systems generated revenues worth $5.18 billion, which contributed 73.5% to its net revenues, reflecting growth of 6% from the year-ago quarter. AGS reported revenues of $1.64 billion (23.3% of net revenues), up 11.4% from the prior-year quarter.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Revenues from Display and Adjacent Markets were $211 million (3% of net revenues), down 29% from the year-ago quarter. Corporate and Other revenues were $18 million (0.3% of revenues), down 75% year over year.
Revenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China were $1.15 billion, (up by 43.6%), $405 million (down by 8%), $581 million (down by 15%), $1.17 billion (up by 57%), $1.28 billion (up by 39%), $314 million (up by 87%) and $2.14 billion (down by 28%).
Revenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China contributed 16%, 6%, 8%, 17%, 18%, 5% and 30% to net sales, respectively.
AMAT generated non-GAAP gross profit of $3.3 billion, up 5% year over year. The non-GAAP gross margin expanded 20 basis points (bps) to 47.5%. The non-GAAP operating margin of 29.3% contracted 20 bps year over year.
AMAT’s FY24 Performance in Brief
Applied Materials’ fiscal 2024 revenues increased 2% year over year to $27.18 billion and surpassed the Zacks Consensus Estimate of $27.07 billion. Its non-GAAP gross margin improved 80 basis points to 47.6% while the non-GAAP operating margin expanded 10 basis points to 29.2%.
Non-GAAP earnings for fiscal 2024 increased 7% year over year to $8.65 per share and beat the consensus mark of $8.51.
Applied Material’s Balance Sheet & Cash Flow
Applied Materials had cash and short-term investments of $9.5 billion as of Sept. 30, 2024, compared with $9.1 billion as of June 30, 2024.
Long-term debt was $5.46 billion as of Sept. 30, down from $6.16 billion as of June 30.
Cash flow from operations was $2.58 billion and free cash flow was $2.17 billion in the fourth quarter. During the quarter, Applied Materials bought back shares worth $1.44 billion and paid $329 million in dividends.
During fiscal 2024, the company generated $8.68 billion in cash from operations and distributed $5.01 billion to shareholders, including $3.82 billion in share repurchases and $1.19 billion in dividends.
AMAT Initiates Q1 Guidance
For the first quarter of fiscal 2025, AMAT expects revenues to be $7.15 billion, (plus or minus $400 million). The Zacks Consensus Estimate for revenues is pegged at $7.16 billion, suggesting a year-over-year rise of 6.8%.
Applied Materials expects non-GAAP diluted EPS to be approximately $2.29, (plus or minus $0.18). The Zacks Consensus Estimate for earnings is pegged at $2.23 per share, indicating a year-over-year rise of 4.7%.
Zacks Rank & Stocks to Consider
Currently, Applied Materials carries a Zacks Rank #3 (Hold) at present.
Blackberry (BB - Free Report) , Amphenol (APH - Free Report) and Advantest (ATEYY - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
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AMAT Q4 Earnings Beat: Will Dim Sales Guidance Pull the Stock Down?
Applied Materials (AMAT - Free Report) ended fourth-quarter fiscal 2024 on a strong note by reporting better-than-expected results. Fourth-quarter non-GAAP earnings of $2.32 per share surpassed the Zacks Consensus Estimate by 6.4% and improved 9% year over year.
AMAT’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 7.5%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Applied Materials’ fourth-quarter fiscal 2024 revenues of $7.05 billion surpassed the consensus mark by 1.52%. The top line rose 5% year over year due to an impressive performance across its Semiconductor Systems and Applied Global Services (AGS) segments. Robust demand across the United States also contributed to the top-line growth.
Despite strong quarterly performance, Applied Materials issued dim revenue guidance for the first quarter of fiscal 2025. The company’s pessimistic sales outlook is likely to turn investors cautious over its near-term prospects. This could negatively impact AMAT’s share price.
On a year-to-date basis, shares of Applied Materials gained 14.8% against the Zacks Semiconductor Equipment - Wafer Fabrication industry’s decline of 3.2%.
Applied Materials’ Q4 Details
Applied Materials operates through four segments namely, Semiconductor Systems, AGS, Display and Corporate & Other. Stronger-than-expected performances across Semiconductor Systems and AGS drove the top line.
Semiconductor Systems generated revenues worth $5.18 billion, which contributed 73.5% to its net revenues, reflecting growth of 6% from the year-ago quarter. AGS reported revenues of $1.64 billion (23.3% of net revenues), up 11.4% from the prior-year quarter.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Applied Materials, Inc. price-consensus-eps-surprise-chart | Applied Materials, Inc. Quote
Revenues from Display and Adjacent Markets were $211 million (3% of net revenues), down 29% from the year-ago quarter. Corporate and Other revenues were $18 million (0.3% of revenues), down 75% year over year.
Revenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China were $1.15 billion, (up by 43.6%), $405 million (down by 8%), $581 million (down by 15%), $1.17 billion (up by 57%), $1.28 billion (up by 39%), $314 million (up by 87%) and $2.14 billion (down by 28%).
Revenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China contributed 16%, 6%, 8%, 17%, 18%, 5% and 30% to net sales, respectively.
AMAT generated non-GAAP gross profit of $3.3 billion, up 5% year over year. The non-GAAP gross margin expanded 20 basis points (bps) to 47.5%. The non-GAAP operating margin of 29.3% contracted 20 bps year over year.
AMAT’s FY24 Performance in Brief
Applied Materials’ fiscal 2024 revenues increased 2% year over year to $27.18 billion and surpassed the Zacks Consensus Estimate of $27.07 billion. Its non-GAAP gross margin improved 80 basis points to 47.6% while the non-GAAP operating margin expanded 10 basis points to 29.2%.
Non-GAAP earnings for fiscal 2024 increased 7% year over year to $8.65 per share and beat the consensus mark of $8.51.
Applied Material’s Balance Sheet & Cash Flow
Applied Materials had cash and short-term investments of $9.5 billion as of Sept. 30, 2024, compared with $9.1 billion as of June 30, 2024.
Long-term debt was $5.46 billion as of Sept. 30, down from $6.16 billion as of June 30.
Cash flow from operations was $2.58 billion and free cash flow was $2.17 billion in the fourth quarter. During the quarter, Applied Materials bought back shares worth $1.44 billion and paid $329 million in dividends.
During fiscal 2024, the company generated $8.68 billion in cash from operations and distributed $5.01 billion to shareholders, including $3.82 billion in share repurchases and $1.19 billion in dividends.
AMAT Initiates Q1 Guidance
For the first quarter of fiscal 2025, AMAT expects revenues to be $7.15 billion, (plus or minus $400 million). The Zacks Consensus Estimate for revenues is pegged at $7.16 billion, suggesting a year-over-year rise of 6.8%.
Applied Materials expects non-GAAP diluted EPS to be approximately $2.29, (plus or minus $0.18). The Zacks Consensus Estimate for earnings is pegged at $2.23 per share, indicating a year-over-year rise of 4.7%.
Zacks Rank & Stocks to Consider
Currently, Applied Materials carries a Zacks Rank #3 (Hold) at present.
Blackberry (BB - Free Report) , Amphenol (APH - Free Report) and Advantest (ATEYY - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
BB, APH and ATEYY sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Blackberry shares have plunged 32.2% year to date. It is set to report third-quarter fiscal 2025 results on Dec. 19, 2024.
Amphenol shares have jumped 46.4% year to date. It is slated to release fourth-quarter 2024 results on Jan. 22, 2025.
Advantest shares have surged 75.1% year to date. It is slated to report its third-quarter 2024 results on Jan. 29, 2025.