Wednesday, May 14, 2008

Applied Materials reports 26% drop in profit (In line with Estimates) AMAT

From MarketWatch:

Applied Materials Inc. on Tuesday reported a 26% drop in second-quarter profit, but reaffirmed the company's steadily growing solar power business.

But the chip-making equipment manufacturer reported net income of $302.5 million, or 22 cents a share, compared with a profit of $411.4 million, or 29 cents a share, for the year-earlier period.
Revenue was $2.15 billion, down from $2.53 billion. Adjusted income was 26 cents a share. The company's results included an equity-based compensation expense of 3 cents a share.
Analysts expect the chip-making equipment manufacturer to report earnings of 21 cents a share on revenue of $2.12 billion, according to a consensus survey by FactSet Research.

...But Splinter also said, "We think this is the bottom."

The Santa Clara, Calif., company has been steadily expanding into the market for tools to make panels that generate solar electricity and this has helped offset the soft demand in the chip industry.

"We are ramping our display and solar businesses while addressing the challenges of a weaker global chip equipment market," Splinter said in a statement.

Applied Materials' shares have risen more than 10% since the beginning of the year, boosted by its strengthening solar power division, even as other chip-making equipment manufacturers have seen their stocks drop due to the gloomy economy landscape....MORE