Applied Materials (AMAT) Beats Expectations for Q2

Applied Materials Inc. (NASDAQ:AMAT), founded in 1967, started operating as a manufacturer of chemical vapor disposition reactors for semiconductor wafer fabrication. The company went public in 1972 and stepped into new areas but kept its focus on semiconductor manufacturing equipment. Today, it is a leading producer of equipment used to manufacture semiconductor chips, flat panel displays, and solar products (see biggest semiconductor companies in the world).

The California-based company has been benefitting from the shortage of semiconductors around the world. The demand for chips used in electric vehicles, electronics, and other products has increased sharply over the past year. The elevated demand once again drove the financial results of Applied Materials in the second quarter.

Applied Materials recently reported earnings of $1.43 per share for the three months ended May 2, significantly higher than 82 cents per share in the comparable period of 2020. On an adjusted basis, the company earned $1.63 per share, easily beating the consensus forecast of $1.51 per share. Revenue for the quarter climbed 41 percent on a year-over-year basis to $5.58 billion, topping analysts’ average estimate of $5.41 billion.

Speaking on the results, CEO Gary Dickerson said, “Applied Materials’ record performance is underpinned by broad-based strength across our semiconductor businesses. We are confident in our ability to outperform our markets as large, secular trends create sustainable demand for semiconductors and our leadership in materials engineering becomes increasingly critical to deliver new chip technologies.”

Applied Materials also issued a strong financial outlook for the third quarter. The company expects adjusted earnings in the range of $1.70 per share to $1.82 per share on revenue of $5.72 billion and $6.12 billion for the current quarter. The outlook is better than analysts’ average estimate of $1.56 for earnings and $5.53 billion for revenue.