Applied Materials tops experts’ forecasts for earnings and revenue in Q3

Applied Materials tops experts’ forecasts for earnings and revenue in Q3
Written by:
Wajeeh Khan
14th August, 14:32
Updated: 14th August, 14:33
  • Applied Materials tops experts’ forecasts for earnings and revenue in Q3.
  • The U.S. firm gives stronger than expected guidance for the fiscal fourth quarter.
  • The American corporation records £641.64 million of net income in Q3.

Applied Materials Inc. (NASDAQ: AMAT) released its earnings report for the fiscal third quarter on Thursday after the bell. The company’s financial performance in the recent quarter was reported stronger than Wall Street expectations. On the back of its hawkish results for Q3, Applied Materials also gave its full-year guidance that also topped analysts’ estimates.

Applied Materials’ Q3 financial results versus analysts estimates

Applied Materials recorded £641.64 million of net income in the third quarter that translates to 69.43 pence per share. In the comparable quarter of 2019, its net income was capped at a much lower £435.64 million or 46.54 pence per share.

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On an adjusted basis, the Santa Clara-based company earned an even higher 81 pence a share in the fiscal third quarter versus 56.46 pence per share in the same quarter last year. In terms of revenue, the American corporation posted £3.36 billion in the recent quarter versus the year-ago figure of £2.72 billion.

According to FactSet, experts had forecast the company to print a lower £3.20 billion in revenue in the third quarter. Their estimate for earnings per share (EPS), was also capped at a lower 72.48 pence.

Applied Materials’ forecast for the fiscal fourth quarter

For the fiscal fourth quarter, Applied Materials now forecasts its earnings to lie in the range of 85 pence per share to 94 pence per share on an adjusted basis. For revenue, the company now anticipated a range of £3.36 billion to £3.66 billion. In comparison, analysts are expecting the company to register £3.33 billion of revenue in the fourth quarter and 79 pence of adjusted earnings per share.

Earlier this year in July, Applied Materials launched a new technology that solved a critical bottleneck to continued 2D scaling. The company saw minimal impact on its financial performance from the ongoing Coronavirus pandemic that has so far infected more than 5 million people in the United States and caused over 170 thousand deaths.

Shares of the company opened just under 4% up on Friday. The stock continued its gain in the next hour and jumped another 1%. Applied Materials tanked to £29 per share in March as COVID-19 disrupted operations, but has now recovered back to £52.19 per share that marks an about 10% gain as compared to the price at which it started the year 2020.

At the time of writing, Applied Materials is valued at £48 billion and has a price to earnings ratio of 21.87.

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