Applied Materials Inc. (AMAT), Inc, the world's biggest semiconductor equipment maker, is scheduled report its fiscal fourth quarter 2009 financial results on Wednesday, November 11, 2009. In the last four quarters, the company's actual earnings differed consensus estimates significantly – this time the actual earnings could match the consensus estimates.
Applied Materials reported total revenues of $1,133 million during the third quarter ended July 26, 2009, compared to $1,848 million in the third quarter of 2008. The company reported a net income of $38 million and earnings loss per share of $0.04 during the third quarter of 2009, compared to net income of $41 million and earnings per share of $0.12 in the third quarter of the prior year.
The company expects revenue to be up 10-20% in its fourth quarter on the strength of improved sales at display, SSG and AGS. The company expects earnings to return to profitability in its fiscal Q4 and the EPS target to be within a range of break even to a positive $0.04 per share.
In line with the company' estimates, Analysts' estimates for the quarter ending October 2009 (Q4) range from a low of $0.01 to a high of $0.04, with a consensus of $0.026. For the fiscal quarter ending October 2009, the consensus EPS forecast has decreased over the past week from $0.027 to $0.026 (-3.70%) and decreased over the past month from $0.027 to $0.026 (-3.70%). Of the 27 analysts making quarterly forecasts, none raised and none lowered their forecast.
Downward revision in the Analysts' consensus earnings estimate is attributable to the lower foundry activity, correction in DRAM expectations. Moreover, I guess, the company will not be able to get its operating margin in the range of 25-35%. However, there are also a few positive developments in the fourth quarter. In the last quarter, we saw a conversion of the Chinese TV market to flat panels, basically almost doubling the flat panel purchases in China and probably strong flat panel purchases in the US as well.
For the fiscal year ending October 2009, forecast has decreased over the past week from -$0.144 to -$0.145 (-0.69%) and decreased over the past month from -$0.144 to -$0.145 (-0.69%). Of the 19 analysts making yearly forecasts, none raised and none lowered their forecast.
The company's stock closed Thursday at $12.4, compared to the 52 week range of $7.8 and $14.19. The stock seems to be trading at appropriate levels.
