The 10-second takeaway
For the quarter ended Jan. 27 (Q1), Applied Materials beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share contracted significantly.
Gross margins grew, operating margins contracted, net margins dropped.
Applied Materials logged revenue of $1.57 billion. The 16 analysts polled by S&P Capital IQ predicted revenue of $1.56 billion on the same basis. GAAP reported sales were 28% lower than the prior-year quarter's $2.19 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.06. The 16 earnings estimates compiled by S&P Capital IQ anticipated $0.03 per share. GAAP EPS of $0.03 for Q1 were 67% lower than the prior-year quarter's $0.09 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 37.0%, 110 basis points better than the prior-year quarter. Operating margin was 3.1%, 900 basis points worse than the prior-year quarter. Net margin was 2.2%, 310 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.81 billion. On the bottom line, the average EPS estimate is $0.12.
Next year's average estimate for revenue is $7.79 billion. The average EPS estimate is $0.59.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,017 members out of 2,133 rating the stock outperform, and 116 members rating it underperform. Among 472 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 452 give Applied Materials a green thumbs-up, and 20 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Applied Materials is outperform, with an average price target of $12.88.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.