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Applied Materials $2.2B Senior Notes Get Moody's A3 Rating
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AppliedMaterials Inc. (AMAT - Free Report) recently announced the pricing of senior unsecured notes aggregating $2.2 billion. These bonds have been issued in two tranches of $1.2 billion and $1 billion with varying coupon rates and maturity dates. The offering is expected to close on Mar 31, 2017, subject to customary closing conditions.
The $1.2 billion notes, carrying an annual interest rate of 3.300%, will mature in 2027. The $1 billion senior notes, with annualized interest rate of 4.350%, are due to mature in 2047.
Management stated that a portion of the proceeds will be used to redeem the $200 million notes, carrying a coupon rate of 7.125%, set to mature on Oct 15, 2017. The remaining would be used for general corporate purposes.
J.P. Morgan, Citigroup, MUFG, Credit Suisse and Goldman, Sachs & Co. will act as joint book-running managers for the offering.
Over the past one year, shares of Applied Materials outperformed the Zacks categorized Semiconductor Equipment Wafer Fabrication industry. While the industry gained 53.36%, the stock returned 88.54%.
Moody's Rating
Leading credit rating agency Moody's gave Applied Materials’ debt issue an A3 rating along with a stable outlook. The rating was based on the company’s leading position in several sub-segments of the semiconductor equipment market. Moody’s is encouraged by Applied Materials’ solid liquidity profile and ability to repay debts on time.
However, the rating takes into account the increasingly competitive semiconductor market and increased volatility due to consolidation within Applied Materials’ customer base.
Last Quarter Earnings
Applied Materials is one of the world’s largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers.
In the last reported fiscal first quarter, Applied Materials reported earnings of 67 cents per share, surpassing the Zacks Consensus Estimate by a penny. Though revenues marginally missed the Zacks Consensus Estimate, it increased 45.2% year over year. In fact, the company’s orders and earnings were at an all-time high.
Applied Materials also provided strong guidance for the second quarter of fiscal 2017. Revenues are expected between $3.45 and $3.60 billion, up 44% year over year at the midpoint. Non-GAAP EPS is expected to be in the range of 72–80 cents, in line with the consensus mark of 76 cents.
Applied Materials currently carries a Zacks Rank #1 (Strong Buy). Some other stocks worth considering in the broader technology sector are ON Semiconductor Corporation (ON - Free Report) , Analog Devices (ADI - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, estimates for ON Semiconductor were up 7.8% in the last 60 days. Estimates for Analog Devices and Advanced Energy increased 20.4% and 18.2%, respectively.
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Applied Materials $2.2B Senior Notes Get Moody's A3 Rating
Applied Materials Inc. (AMAT - Free Report) recently announced the pricing of senior unsecured notes aggregating $2.2 billion. These bonds have been issued in two tranches of $1.2 billion and $1 billion with varying coupon rates and maturity dates. The offering is expected to close on Mar 31, 2017, subject to customary closing conditions.
The $1.2 billion notes, carrying an annual interest rate of 3.300%, will mature in 2027. The $1 billion senior notes, with annualized interest rate of 4.350%, are due to mature in 2047.
Management stated that a portion of the proceeds will be used to redeem the $200 million notes, carrying a coupon rate of 7.125%, set to mature on Oct 15, 2017. The remaining would be used for general corporate purposes.
J.P. Morgan, Citigroup, MUFG, Credit Suisse and Goldman, Sachs & Co. will act as joint book-running managers for the offering.
Over the past one year, shares of Applied Materials outperformed the Zacks categorized Semiconductor Equipment Wafer Fabrication industry. While the industry gained 53.36%, the stock returned 88.54%.
Moody's Rating
Leading credit rating agency Moody's gave Applied Materials’ debt issue an A3 rating along with a stable outlook. The rating was based on the company’s leading position in several sub-segments of the semiconductor equipment market. Moody’s is encouraged by Applied Materials’ solid liquidity profile and ability to repay debts on time.
However, the rating takes into account the increasingly competitive semiconductor market and increased volatility due to consolidation within Applied Materials’ customer base.
Last Quarter Earnings
Applied Materials is one of the world’s largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers.
In the last reported fiscal first quarter, Applied Materials reported earnings of 67 cents per share, surpassing the Zacks Consensus Estimate by a penny. Though revenues marginally missed the Zacks Consensus Estimate, it increased 45.2% year over year. In fact, the company’s orders and earnings were at an all-time high.
Applied Materials also provided strong guidance for the second quarter of fiscal 2017. Revenues are expected between $3.45 and $3.60 billion, up 44% year over year at the midpoint. Non-GAAP EPS is expected to be in the range of 72–80 cents, in line with the consensus mark of 76 cents.
Applied Materials, Inc. Price and Consensus
Applied Materials, Inc. Price and Consensus | Applied Materials, Inc. Quote
Zacks Rank and Stocks to Consider
Applied Materials currently carries a Zacks Rank #1 (Strong Buy). Some other stocks worth considering in the broader technology sector are ON Semiconductor Corporation (ON - Free Report) , Analog Devices (ADI - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, estimates for ON Semiconductor were up 7.8% in the last 60 days. Estimates for Analog Devices and Advanced Energy increased 20.4% and 18.2%, respectively.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>