Applied Materials’ Profit Tops Expectations

Applied Materials Inc. reported a fiscal third-quarter pre-charge profit that exceeded analysts’ expectations, although it had lower revenue and higher research and development spending. The Santa Clara-based manufacturer of chip equipment said net income, before a charge for the period ended July 27, was $145.2 million, or 77 cents a share, down 14% from $169.1 million, or 92 cents, a year ago. Wall Street had expected the company to earn 68 cents a share based on the average estimate of 23 analysts polled by IBES International Inc. The company recorded a pretax gain of $80 million related to a litigation settlement with Novellus Systems and a charge of $16.3 million for bad debt. After the gain and charge, the company had net income of $186.6 million, or 98 cents a share. Revenue for the quarter fell to $1.06 billion from $1.12 billion. Shares of Applied Materials rose 75 cents to close at $90.25 on Nasdaq.