Applied Materials posted fourth quarter earnings that surpassed analysts’ expectations.
The chip equipment company’s adjusted earnings came in at $2.03 a share for the October quarter, beating the consensus of $1.73 (based on FactSet survey). Revenue of $6.75 billion also topped analysts’ expectations of $6.45 billion.
Applied Materials’ Semiconductor Systems segment generated sales of $5.04 billion (~75% of overall net sales), up +17% year-over-year. Applied Global Services sales rose +4% year-over-year to $1.42 billion (21% of net sales), while Display and Adjacent Markets revenue fell -40% year-over-year to $251 million (4% of net sales).
Sales in the US climbed 23.3% year-over-year, while those in Europe were up 13.3%. Korea and Taiwan had +7.8% increase and +66.8% rise respectively. Southeast Asia sales were up +120%. Sales in Japan slipped -1.1%, and those in China plunged -35% from the year-ago quarter.
The non-GAAP gross margin contracted -220 basis points to 46%. Non-GAAP operating margin of 29.8% was 330 bps narrower vs. the year-ago quarter’s figure.
For first-quarter fiscal 2023, Applied Materials projects net sales of $6.7 billion (+/-$400 million), higher than The Zacks Consensus Estimate of $6.38 billion. Guidance for non-GAAP earnings per share is $1.93 (+/-0.18) vs. The Zacks Consensus Estimate of $1.91.