Can Applied Materials’ Q1 Beat, Surprise Outlook Boost Chips?

By | February 19, 2016

Scalper1 News

Applied Materials ( AMAT ) stock popped late Thursday on Q2 guidance that indicates robust semiconductor demand despite chipmakers’ stumbling start to 2016 and the specter of Apple ‘s ( AAPL ) waning iPhone sales. In after-hours trading Applied stock jumped more than 7%, after closing up by a fraction in regular-session trading. Shares are down 8% for the year, reflecting a 9% depression in IBD’s 36-company Electronic-Semiconductor Equipment industry group. For fiscal Q1 ended Jan. 31, Applied reported $2.26 billion in sales and 26 cents earnings per share ex items. Both metrics were down 4% vs. the year-earlier quarter, but topped Wall Street expectations . The consensus of 22 analysts polled by Thomson Reuters was expecting $2.24 billion and 25 cents — in line with Applied’s three-months-ago view for $2.16 billion to $2.3 billion and 23-27 cents. Current-quarter guidance shattered estimates. Applied guided to $2.37 billion to $2.49 billion in sales and 30-34 cents EPS ex items. The low end of both guidance measures topped Wall Street’s model for $2.28 billion and 26 cents. Sales would be flat at the midpoint, and EPS minus items would soar 10% year over year. Applied’s guidance speaks well for the semiconductor community, which tripped early this year on lackluster iPhone sales, fears that Moore’s Law would compress growth, and macroeconomic weakness in China. IBD’s 41-company Electronic-Semiconductor Fabless industry group is down 10% thus far into 2016, matching the same plunge in IBD’s Electronic-Semiconductor Manufacturing industry group of 41 companies. Applied trails ASML Holdings ( ASML ) in market cap — $19.6 billion to $36.8 billion. Applied makes machines that manufacture semiconductors. ASML produces lithography gear, also used to make chips. Scalper1 News

Scalper1 News