01—Abstract
Summary
Summary of the 10-K filed December 6, 2011. Cited figures are marked; the original filing is the authoritative source.
Applied Materials, Inc. (AMAT) reported strong financial performance for the fiscal year ended October 29, 2011, with net sales reaching $10.5 billiona, a 10% increase from the previous year.
This growth was primarily driven by strong demand in the crystalline-silicon (c-Si) solar equipment market and increased sales of spare parts and refurbished semiconductor equipment. The company's Silicon Systems Group, its largest segment, showed resilience with flat net sales, while Applied Global Services and Energy and Environmental Solutions segments experienced significant growth. The Display segment faced a cyclical downturn, leading to decreased net sales.
Despite a 1% decrease in new orders year-over-year, reflecting softening demand in the latter half of the year for semiconductor and LCD equipment, the company managed its operations effectively, resulting in a robust operating income of $2.4 billionb and a net income of $1.9 billion. The acquisition of Varian Semiconductor Equipment Associates, Inc. in November 2011 for approximately $4.2 billion was a significant event, strengthening AMAT's position in transistor technologies and ion implantation.
Overall, AMAT demonstrated solid execution in a mixed market environment, supported by strategic investments in R&D and a significant acquisition. The company's diversified business model, spanning semiconductor, display, and solar industries, provided stability, and it remains well-positioned to capitalize on future technological advancements and market recovery.
02—Key points
Key Highlights
- Net sales reached a record $10.5 billion, a 10% increase year-over-year, driven by strong performance in c-Si solar and Applied Global Services.
- Acquisition of Varian Semiconductor Equipment Associates, Inc. for approximately $4.2 billion significantly enhanced AMAT's capabilities in ion implantation and transistor technologies.
- Operating income was strong at $2.4 billion, and net income reached $1.9 billion.
- Silicon Systems Group, the largest segment, maintained flat net sales despite a softening semiconductor market in the second half of the year.
- Applied Global Services and Energy & Environmental Solutions segments showed significant growth in new orders and net sales.
- The Display segment experienced a cyclical downturn, leading to a decrease in net sales and operating income.
- The company continued significant investment in R&D, allocating $1.1 billion (11% of net sales) to drive innovation and future growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Applied Materials kept $0.18.
- Revenue$10.52B100.0%
- Cost of revenue−$6.16B58.5%
- Gross profit$4.36B41.5%
- Operating costs−$1.96B18.7%
- Operating income$2.40B22.8%
- Interest, other & tax−$472.0M4.5%
- Net income$1.93B18.3%
Where FY2011 revenue went
$10.52B- Cost of revenue: $6.16B, 59% of revenue
- Net income: $1.93B, 18% of revenue
- R&D: $1.12B, 11% of revenue
- SG&A: $901.0M, 8.6% of revenue
- Interest, other & tax: $472.0M, 4.5% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed December 6, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $10.52B$9.55B | +10.1% |
| Cost of Revenue | $6.16B$5.83B | +5.5% |
| Gross Profit | $4.36B$3.71B | +17.4% |
| R&D Expenses | $1.12B$1.14B | −2.2% |
| SG&A Expenses | $901.00M$942.00M | −4.4% |
| Operating Expenses | $1.96B$2.33B | −15.8% |
| Operating Income | $2.40B$1.38B | +73.3% |
| Interest Expense | $59.00M$21.00M | +181.0% |
| Net Income | $1.93B$938.00M | +105.3% |
| EPS (Basic) | $1.46$0.70 | +108.6% |
| EPS (Diluted) | $1.45$0.70 | +107.1% |
| Shares Outstanding (Basic) | 1.32B1.34B | −1.6% |
| Shares Outstanding (Diluted) | 1.33B1.35B | −1.4% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Applied Materials' revenue growth in fiscal year 2011?
Applied Materials' revenue growth in fiscal year 2011 was primarily driven by increased industry investment in crystalline-silicon (c-Si) solar equipment and higher sales of spare parts and refurbished semiconductor equipment through its Applied Global Services segment. The company also saw growth in its Energy and Environmental Solutions segment.
What is the significance of the Varian Semiconductor Equipment Associates, Inc. acquisition for Applied Materials?
The acquisition of Varian Semiconductor Equipment Associates, Inc. for approximately $4.2 billion in November 2011 was a significant strategic move. It strengthened Applied Materials' product portfolio with Varian's leading ion implantation technology, positioning AMAT as a leader in transistor technologies and expanding its capabilities within the semiconductor industry.
How did the different business segments perform in fiscal year 2011?
The Silicon Systems Group maintained flat net sales despite market conditions. Applied Global Services and Energy and Environmental Solutions segments saw significant growth. The Display segment experienced a cyclical downturn, leading to decreased net sales and operating income. Overall, net sales increased by 10% to $10.5 billion, but new orders saw a slight 1% decrease, reflecting market softening in the latter half of the year.
What is Applied Materials' strategy regarding research and development (R&D)?
Applied Materials maintains a strong commitment to R&D, investing $1.1 billion (11% of net sales) in fiscal year 2011. The company focuses on developing new products and technologies to meet evolving customer requirements, particularly in areas like sub-22nm chip manufacturing, 3D gate structures, and advanced display technologies, aiming to maintain a competitive advantage and drive future growth.
06—Continue