With the whirlwind of Q1 earnings season news now fading, investors have a chance to stop and think a bit about the companies whose earnings releases didn't, perhaps, receive all the attention they deserved. Today, I want to look at one such company: semiconductor equipment manufacturer Applied Materials (NASDAQ:AMAT).

Applied Materials announced disappointing earnings last week. Disappointing not just because of the numbers, but also because of the promise the company seemed to hold earlier this year that remains unfulfilled. Back in January, if you recall, tech bellwether Intel (NASDAQ:INTC) announced plans to increase its capital spending by more than 30% in fiscal 2005. Analysts agreed that this could translate into beaucoup bucks for the companies that supply the equipment that Intel (and any of its competitors that wanted to keep pace with it) would be spending all that cash on. It could boost Applied Materials first of all, as the leader in the chip equipment industry. But it could also bolster Applied Materials' competitors: Lam Research (NASDAQ:LRCX), Novellus (NASDAQ:NVLS), and KLA-Tencor (NASDAQ:KLAC).

But it isn't working out that way, at least so far. As revealed last week, sales have declined year on year by 8%, and profits by 18%. If the company's investors found any solace in that news, it was likely in that two of Applied Materials' competitors fared even worse: Novellus' profits took a 19% hit; Lam's declined 29%. KLA became the exception proving the rule by actually growing its profits by 1%.

Lousy news? No doubt. But consider that as bad as Applied Materials' numbers appeared, the earnings news is just one part of the investment picture. As fellow Fool Dan Bloom argued last month, for all its troubles, Applied Materials still sports a below-market valuation and sits perched high upon a pile of cash, tall enough to keep its corporate feet dry through even the wettest of financial floods.

Intel-funded windfall or no, Applied Materials has maintained that cash hoard (now at $6 billion after netting out debt). It has whittled away 4.5% of its accounts receivable and disposed of 6.5% of its inventories. And it has grown revenues by 5% and profits by 6% compared with the previous quarter. With annual free cash still flowing in at about $1.5 billion a year, the company boasts an enterprise value-to-free cash flow (EV/FCF) ratio of 14 -- a significant discount to rivals KLA and Novellus, and only a bit pricier than ultra-cheap Lam.

Applied Materials doesn't look like a steal of a deal just yet, I'll grant you. And it won't until it can get its profits growing again. But mark my words: Once those profits start growing again, it will be too late to buy this industry leader for a paltry 14 times EV/FCF.

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Fool contributor Rich Smith holds no position in any of the companies mentioned in this article.