Have you evaluated the performance of Applied Materials' (AMAT Quick QuoteAMAT - Free Report) international operations for the quarter ending April 2025? Given the extensive global presence of this maker of chipmaking equipment, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.

In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

Our review of AMAT's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

The company's total revenue for the quarter amounted to $7.1 billion, marking an increase of 6.8% from the year-ago quarter. We will next turn our attention to dissecting AMAT's international revenue to get a clearer picture of how significant its operations are outside its main base.

A Closer Look at AMAT's Revenue Streams Abroad

Korea accounted for 22.00% of the company's total revenue during the quarter, translating to $1.56 billion. Revenues from this region represented a surprise of +23.76%, with Wall Street analysts collectively expecting $1.26 billion. When compared to the preceding quarter and the same quarter in the previous year, Korea contributed $1.67 billion (23.26%) and $988 million (14.87%) to the total revenue, respectively.

Of the total revenue, $2 billion came from Taiwan during the last fiscal quarter, accounting for 28.13%. This represented a surprise of +67.72% as analysts had expected the region to contribute $1.19 billion to the total revenue. In comparison, the region contributed $1.18 billion, or 16.51%, and $1.02 billion, or 15.33%, to total revenue in the previous and year-ago quarters, respectively.

China generated $1.77 billion in revenues for the company in the last quarter, constituting 24.99% of the total. This represented a surprise of -26.59% compared to the $2.42 billion projected by Wall Street analysts. Comparatively, in the previous quarter, China accounted for $2.24 billion (31.30%), and in the year-ago quarter, it contributed $2.83 billion (42.60%) to the total revenue.

During the quarter, Europe contributed $252 million in revenue, making up 3.55% of the total revenue. When compared to the consensus estimate of $350.14 million, this meant a surprise of -28.03%. Looking back, Europe contributed $330 million, or 4.61%, in the previous quarter, and $289 million, or 4.35%, in the same quarter of the previous year.

Japan accounted for 8.06% of the company's total revenue during the quarter, translating to $572 million. Revenues from this region represented a surprise of +4.55%, with Wall Street analysts collectively expecting $547.09 million. When compared to the preceding quarter and the same quarter in the previous year, Japan contributed $540 million (7.54%) and $453 million (6.82%) to the total revenue, respectively.

Southeast Asia generated $135 million in revenues for the company in the last quarter, constituting 1.90% of the total. This represented a surprise of -57.72% compared to the $319.29 million projected by Wall Street analysts. Comparatively, in the previous quarter, Southeast Asia accounted for $286 million (3.99%), and in the year-ago quarter, it contributed $213 million (3.20%) to the total revenue.

Revenue Forecasts for the International Markets

The current fiscal quarter's total revenue for Applied Materials, as projected by Wall Street analysts, is expected to reach $7.18 billion, reflecting an increase of 6% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Korea is anticipated to contribute 18.5% or $1.33 billion, Taiwan 17.1% or $1.23 billion, China 31.8% or $2.29 billion, Europe 5.1% or $364.08 million, Japan 7.9% or $568.48 million and Southeast Asia 4.8% or $345.65 million.

Analysts expect the company to report a total annual revenue of $28.84 billion for the full year, marking an increase of 6.1% compared to last year. The expected revenue contributions from Korea, Taiwan, China, Europe, Japan and Southeast Asia are projected to be 19.6% ($5.65 billion), 16.8% ($4.86 billion), 32.2% ($9.28 billion), 4.9% ($1.42 billion), 7.7% ($2.23 billion) and 4.4% ($1.28 billion) of the total revenue, in that order.

In Conclusion

Applied Materials' reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Applied Materials, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Exploring Recent Trends in Applied Materials' Stock Price

Over the past month, the stock has gained 20.5% versus the Zacks S&P 500 composite's 13.1% increase. The Zacks Computer and Technology sector, of which Applied Materials is a part, has risen 18.9% over the same period. The company's shares have declined 3.7% over the past three months compared to the S&P 500's 2.3% decline. Over the same period, the sector has declined 4.8%.