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Applied Materials Posts Record Results

AMAT  Santa Clara, California-based Applied Materials, Inc. (NASDAQ: AMAT – $35.18) reported fiscal first quarter new orders were $4.24 billion, up 86% year over year and net sales of $3.28 billion, up 45%, slightly higher than analysts had modeled. Adjusted earnings per share came in at $0.67 vs. $0.26 a year ago, and a penny ahead of consensus. For the current quarter, the company sees revenue of $3.45 billion to $3.6 billion, and per share earnings of $0.72 to $0.80. That is better than consensus for $3.27 billion and 74 cents. For the full year, the Street is anticipating AMAT to earn $2.55 per share, vs. $1.75 in fiscal 2016. I am also looking for a 10% uptick in the company’s dividend sometime this year.

       The company provides manufacturing equipment, services and software to the semiconductor, display and related industries worldwide. A robust cash pile, healthy cash flow and a manageable debt level give management the wherewithal to make further share repurchases and perhaps an acquisition. The shares are not cheap for a cyclical company like Applied Materials, but I am going to retain the position, up 121% over the past twelve months, for now.


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