Applied Materials Profit Tops Street, Outlook Strong; Shares Up 7%

(RTTNews) - Applied Materials Inc. (AMAT) Thursday reported a drop in profit for the first quarter, hurt largely by higher operating costs and lower revenues. Nevertheless, the semiconductor equipment maker's earnings for the quarter trumped Wall Street estimates by a penny, as did revenues.

Moving ahead, the company projected a strong outlook for the second quarter, sending its shares up by 7 percent in the extended trading session.

Santa Clara, California-based Applied Materials' first-quarter profit dropped to $286 million or $0.25 per share from $348 million or $0.28 per share last year.

Adjusted earnings for the quarter decreased to $302 million or $0.26 per share from $338 million or $0.27 per share last year. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.25 per share for the quarter. Analysts' estimates typically exclude special items.

Applied Materials' first-quarter revenues decreased 4 percent to $2.26 billion from $2.36 billion last year. Analysts had a consensus revenue estimate of $2.24 billion for the quarter.

"As the market moves into the sweet spot for Applied's materials engineering technology, we see strong demand for our semiconductor, display and service businesses," said Gary Dickerson, president and CEO.

Applied Materials' products are used by chip companies to make smartphone and memory chips, and investors consider its orders and sales as an important metric to gauge the demand pattern of the electronics market.

Sales declined across Applied Materials' silicon systems, display segments and energy and environmental solutions businesses, while applied global services unit revenues increased.

Looking forward to the second quarter, Applied Materials expects adjusted earnings of $0.30 to $0.34 per share and sales growth of 5 percent to 10 percent sequentially. Analysts currently estimate earnings of $0.26 per share.

AMAT closed Thursday's trading at $17.17, up $0.03 or 0.18%, on the Nasdaq. The stock further rose $1.23 or 7.16% in the after-hours trade.