Applied Materials Reports Profit, Stronger Demand
Applied Materials Inc., the No.1 maker of tools used to produce microchips, reported a fiscal second-quarter profit Tuesday and said renewed demand for consumer electronics helped push orders up 51%, topping Wall Street expectations.
The Santa Clara, Calif., company also predicted a 10%-to-15% rise in orders for its fiscal third quarter. The double dose of good news came after the markets closed and boosted the company’s shares to $27.95 in after-hours trading. They had risen $1.06 to $26.64 in regular Nasdaq trading.
Applied Materials said it earned $52 million, or 3 cents a share, in the quarter ended April 28, compared with $318 million, or 19 cents, a year earlier.
Wall Street had expected earnings of 2 cents a share, according to a survey of 27 analysts by Thomson Financial/First Call.
Sales fell to $1.16 billion from $2.14 billion.
New orders, the most-watched business indicator for chip equipment makers such as Applied, rose to $1.69 billion from $1.12 billion in the first quarter, topping Wall Street expectations, which peaked at $1.5 billion.
“We’ve seen a moderate recovery, driven by strong consumer- related demand and a strengthening wireless market in Europe and Asia,” Applied Materials Chief Executive James Morgan said.
Factories that make chips for advanced electronics are approaching their limits, Morgan said, leading to a jump in investment in advanced production tools.
Still, some segments of the economy, such as telecommunications and information technology spending, are lagging, he said.
Nevertheless, orders grew strongly. The company said 21 customers placed orders in the second quarter in excess of $10 million, compared with 11 customers in the first quarter.
In other technology earnings reports Tuesday:
* Computer Associates International Inc. reported a $238-million fiscal fourth-quarter loss, the sixth consecutive quarter the company failed to turn a profit. But the Islandia, N.Y.-based software firm raised its estimates for the current quarter and for all of fiscal 2003.
The loss for the quarter ended March 31, which amounted to 41 cents a share, was smaller than the year-earlier shortfall of $410 million, or 71 cents a share. Revenue rose 6% to $772 million.
The company, whose accounting remains under inquiry by the Securities and Exchange Commission, reported its earnings under generally accepted accounting principles, dropping the controversial pro forma method seen in its previous reports.
Excluding one-time items, the company broke even, compared with a year-earlier loss of 29 cents a share. The results were better than expected.
* Computer Sciences Corp. of El Segundo said it had a fiscal fourth-quarter profit of $141.1 million after it cut expenses and won more contracts with the U.S. government. Net income in the quarter ended March 29 was 82 cents a share, contrasted with a loss of $37.4 million, or 22 cents, a year earlier. Revenue at the third- largest seller of computer services rose 5.1% to $3.05 billion.
* Interplay Entertainment Corp., a struggling Irvine video game developer, posted its first quarterly profit in more than two years. Interplay earned $1.5 million, or 2 cents a share, in the first quarter, contrasted with a loss of $8.4 million, or 30 cents, a year earlier. Revenue declined 8% to $15.4 million.
* I/OMagic Corp., a Santa Ana developer of optical storage and related products, reported first-quarter net income of $1 million, or 1 cent a share, contrasted with a net loss of $2.1 million, or 3 cents, a year earlier. Sales rose to $26.7 million from $10 million.
* STM Wireless Inc. in Irvine posted a loss of $2.2 million, or 30 cents a share, in the first quarter, compared with a loss of $764,000, or 11 cents, a year earlier. Revenue declined 8% to $5.7 million.
