Total sales increased 21% year over year to $2.0 billion, led by a 43% increase in silicon systems revenue. Non-GAAP earnings more than tripled to $0.19 per share. Both numbers were just above Wall Street targets.
The company is preparing for a planned merger with Japanese peer Tokyo Electron. The all-stock transaction will create an industry giant with a $29 billion market value. The deal is expected to close in the summer of 2014, pending regulatory approvals.
So far, the planned combination has not made a big impact on Applied Materials' results. The company has not adjusted its research and development plans to align with the planned merger. The only effect on Applied Materials' results so far was a $24 million onetime charge in the fourth quarter to account for the costs of preparing the deal and moving it through regulatory processes.
Looking ahead, management set a wide revenue target range, between 3% and 10% higher sequential sales. Earnings guidance was also loose, ranging from $0.20 to $0.24 per share. These figures work out to sequential improvements between 5% and 26%.