APPLIED MATERIALS INC /DE Quarterly Report for Q1 Ended Jan 25, 2009

Summary

Applied Materials Inc. (AMAT) reported a net loss of $132.9 million, or $(0.10) per diluted share, for the first quarter of fiscal year 2009, a significant decline from a net income of $262.4 million, or $0.19 per diluted share, in the same quarter of the prior year. This downturn is attributed to a challenging macroeconomic environment and the cyclical nature of the semiconductor, display, and solar industries, leading to a substantial 36% decrease in net sales to $1.33 billion from $2.09 billion year-over-year. The company also incurred significant restructuring charges of $133 million related to a workforce reduction program initiated in November 2008. Despite the operational challenges, AMAT's financial position remains relatively solid, with total assets of $10.43 billion and total stockholders' equity of $7.36 billion as of January 25, 2009. The company's cash, cash equivalents, and investments stood at $3.13 billion. Management anticipates continued challenging conditions for fiscal year 2009, with expected decreases in orders and revenue, and is focused on managing costs and maintaining financial flexibility.

Key Highlights

• 1Net loss of $132.9 million for the quarter, compared to a net income of $262.4 million in the prior year's quarter.
• 2Net sales decreased by 36% to $1.33 billion, reflecting weak global economic and industry conditions.
• 3Gross margin percentage declined significantly to 29.4% from 44.8% in the prior year's quarter.
• 4Restructuring charges of $133 million were recorded due to a workforce reduction program.
• 5Operating expenses saw an increase in the provision for doubtful accounts, reaching $48 million.
• 6The company ended the quarter with $3.13 billion in cash, cash equivalents, and investments.
• 7New orders declined sharply by 64% year-over-year, indicating a subdued demand environment.

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