Leading chip-equipment maker Applied Materials (NASDAQ:AMAT) followed a solid first quarter with an even stronger second quarter, and the outlook may be brighter still. Sales and new orders continue to climb. It seems the optimism unveiled last November was founded after all.

After the close yesterday, Applied Materials reported record second-quarter sales up a whopping 82% to $2.02 billion. New orders jumped 32% sequentially to $2.21 billion, more than doubling from a year ago and turning that quarter's $62 million loss into a net profit of $373 million, or $0.22 per share.

In addition to the ramping sales, cost controls were primary drivers. In the second quarter, gross margins clocked in at 46.5%, up from 43.5% in the first quarter, and well ahead of last year's 33.7%. Further helping comparisons, this year's results were clear of last year's $92.7 million restructuring charge.

Ahead, the grass only looks greener.

Management expects third-quarter earnings to climb to between $0.23 and $0.25 per share, as sales increase another 5% sequentially to about $2.12 billion. And while investors remain concerned about just how far this surge can go, the continued growth in orders and the company's $2.8 billion backlog suggest that there may yet be some legs to this one.

Further, while we cautioned back in November that the optimism was likely priced into the stock, those shares have since fallen to a more reasonable level. And now, like a zillion other companies these days, including Anheuser-Busch (NYSE:BUD), ExxonMobil (NYSE:XOM), Cisco (NASDAQ:CSCO), Dell (NASDAQ:DELL), Pepsi (NYSE:PEP), and ShuffleMaster (NASDAQ:SHFL), Applied Materials is buying back shares.

True, as Brian Gorman pointed out in March, investors should balance out the benefits of any share buyback against the number of shares issued to employees via stock options. That said, while yesterday's impressive earnings report didn't really blow away expectations that were already high, there's no denying that Applied Materials is on a roll.

Give us your take on the Applied Materials discussion board.

Fool contributor Jeff Hwang owns shares of Anheuser-Busch.