When fellow Fool Rich Smith previewed last night's earnings announcement from Applied Materials (NASDAQ:AMAT), he pointed out some cash-flow habits that he would dearly love to see the company get out of. So let's see whether it did.
As usual, the maker of semiconductor manufacturing equipment didn't give us a cash flow statement. But if you dialed in to the attendant conference call, you heard CFO George Davis present the numbers we need. Thanks, George, but really, this information belongs in a widely distributed and easily accessible table right alongside the income statement and balance sheet info. Next time, OK?
Here's the data, current and historical.
| Metric |
Q4 2006 |
Q1 2007 |
Q2 2007 |
Q3 2007 |
|---|---|---|---|---|
|
Cash From Operations |
$659 |
$381 |
$513 |
$638 |
|
Capital Expenditures |
$59 |
$59 |
$72 |
$73 |
|
$600 |
$322 |
$441 |
$565 | |
|
$452 |
$397 |
$393 |
$464 |
|
Y-O-Y Growth |
Q4 2006 |
Q1 2007 |
Q2 2007 |
Q3 2007 |
|---|---|---|---|---|
|
345% |
(13%) |
(8%) |
75% | |
|
81% |
153% |
(11%) |
(12%) |
To recap, Rich was worried about the shrinking of Applied's cash flows on an annual basis for at least two quarters in a row. As it turns out, that negative streak has been snapped now, despite an 83% increase in capital expenditures. You'll note that the growth/shrinkage trend here is a bit jumpy, though. Smoothing things out to a trailing-12-month perspective, free cash flow has actually grown at a pretty consistent clip -- at least a 32% annual improvement for four quarters running. So those ominous cash-flow dips appear to have been mere bumps in the road.
This improvement came from strong demand from Applied's memory-making customers, who in turn are seeing improved market conditions. That's good news for owners of Micron (NYSE:MU), Silicon Image (NASDAQ:SIMG), or Spansion (NASDAQ:SPSN), for example. On the downside, the company confirmed what Photronics (NASDAQ:PLAB) has been saying about a challenging flat-panel display market.
So on the whole, it's another fine quarter from Applied Materials. Things are within management guidance, and it's putting to rest those cash-flow concerns.
Further Foolishness:
- Foolish Forecast: Applied Materials Leads the Way
- Foolish Forecast: Friendly Photronics
- 4 More Stocks Under Attack
- Stocks Everyone Says to Buy Now
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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will make your day, every day.
