Applied Materials revealed it beat its 2019 revenue and net income results in the fiscal second quarter last week. However, MarketWatch reports the Santa Clara, California-based corporation fell short of Wall Street’s expectations on sales and earnings per share (EPS).
Though the firm declined to offer guidance for the June period, it forecasts a robust recovery in the second half of 2020.
Applied Materials FQ1 Performance
In late March, the company pulled its FQ2 outlook in the face of mounting coronavirus pandemic prompted challenges. The corporation stated COVID-19 brought major disruption to its production and logistics operations that made near-term visibility difficult. Ultimately, the firm exited the period ending April 26 with revenue of $3.957 billion, net income of $755 million, and EPS of $0.82.
As such, the manufacturer exceeded its FQ2 2019 sales, profits, and EPS by 12, 13, and 17 percent, respectively. On the other hand, the firm fell short of market analyst revenue and earnings expectations by 3.36 and 13.4 percent.
On a per-segment basis, the firm’s foundry, logic, and other sales dipped by 2 percent, but its DRAM revenue increased by 4 percent. Those results align with Applied Material clients Samsung and Intel experiencing a sharp upswing in memory chip orders last quarter.
Return to Form in the Second Half
In its fiscal second-quarter earnings investor call, Applied Materials explained it would not offer an FQ3 financial outlook due to pandemic related market instability. Nevertheless, the firm’s leadership did provide some general expectations about its results for the June period.
CFO Dan Durn mentioned his corporation lost nearly $650 million in revenue because of COVID-19. But the executive also said the company expects to make up those lost sales in FQ3 and FQ4. Indeed, he noted a combination of supply chain improvements and increased demand would result in a sequential high single-digit intake bump in the second half.
CEO Gary E. Dickinson expressed his belief that his corporation would thrive as its clients integrate automation, artificial intelligence, and Internet of Things technologies into their operations. He also named the surging recent popularity of work-from-home, remote learning, and e-commerce will serve as revenue drivers.
Right now, Applied Materials is still cycling back up after the unprecedented headwinds manifested by the pandemic earlier this year. However, the firm’s long-term outlook, which is built on exciting next-generation technological solutions, is solid. Moreover, the company increased its cash and equivalents by 68.77 percent quarter-over-quarter, which reflects a keen understanding of contemporary market conditions.