Aggressive · Stocks to Consider and Updates

Applied Materials Beats Street; Guides Higher

Applied Materials, Inc.  (NASDAQ: AMAT – $43.91) a provider of semiconductor manufacturing equipment and display systems, reported higher-than-expected profit and sales for its fiscal second quarter. Adjusted earnings per share increased to $0.79 in the three months ended April 30, from $0.34, a year earlier. That topped the $0.76 average estimate of analysts. Sales for the period rose to $3.55 billion, from $2.5 billion, that also surpassed consensus of $3.54 billion. Revenue in the semiconductor systems group, applied global services and the display and adjacent markets divisions all contributed to higher sales.

       Looking ahead, the company anticipates third quarter sales to be in the range of $3.6 billion to $3.75 billion and adjusted earnings per share to be in the range of $0.79 to $0.87. Analysts had predicted revenue of $3.42 billion and earnings of $0.69. However, the expectation for AMAT shares – up 117% over the past 52-weeks – are very high at this juncture, and even the slightest miss by the company at this point would likely be met with negative investor sentiment. Nonetheless, I am holding the position for now as the positive trends for the industry, and Applied Materials in particular, remain strong.


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