Applied Materials Beats on Both Top and Bottom Lines

Applied Materials (NAS: AMAT) reported earnings on May 16. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 28 (Q2), Applied Materials beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped to a loss.


Gross margins increased, operating margins contracted, net margins dropped.

Revenue details
Applied Materials logged revenue of $1.97 billion. The 15 analysts polled by S&P Capital IQ wanted to see net sales of $1.92 billion on the same basis. GAAP reported sales were 22% lower than the prior-year quarter's $2.54 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.16. The 17 earnings estimates compiled by S&P Capital IQ averaged $0.13 per share. Non-GAAP EPS of $0.16 for Q2 were 41% lower than the prior-year quarter's $0.27 per share. GAAP EPS were -$0.11 for Q2 against $0.22 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 41.0%, 120 basis points better than the prior-year quarter. Operating margin was 11.2%, 660 basis points worse than the prior-year quarter. Net margin was -6.5%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.05 billion. On the bottom line, the average EPS estimate is $0.19.

Next year's average estimate for revenue is $7.81 billion. The average EPS estimate is $0.64.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,001 members out of 2,117 rating the stock outperform, and 116 members rating it underperform. Among 435 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 417 give Applied Materials a green thumbs-up, and 18 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Applied Materials is outperform, with an average price target of $14.58.

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The article Applied Materials Beats on Both Top and Bottom Lines originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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