10-QPeriod: Q1 FY2010

APPLIED MATERIALS INC /DE Quarterly Report for Q1 Ended Jan 31, 2010

Filed March 9, 2010For Securities:AMAT

Summary

Applied Materials Inc. (AMAT) reported a significant recovery in its first quarter of fiscal year 2010, compared to the same period in the prior year. Net sales increased by 39% to $1.85 billion, driven by a strong rebound in the semiconductor equipment sector, which saw new orders surge by 117%. The company returned to profitability, with net income reaching $82.8 million ($0.06 per diluted share) compared to a net loss of $132.9 million ($(0.10) per diluted share) in the prior year's quarter. The company's improved financial performance reflects a broader recovery in the global economic and industry conditions. Cost control measures, improved factory utilization, and a favorable product mix contributed to a notable increase in gross margin to 38.5% from 29.4% year-over-year. Management expressed optimism for the full fiscal year, expecting net sales in fiscal 2010 to exceed those in fiscal 2009.

Financial Highlights

51 data points
Beta

Revenue

$1.85B

38.5% Gross Margin

Net Income

$83.00M

4.5% Net Margin

EPS (Diluted)

$0.06

Total Assets

$10.00B

Cash & Equivalents

$1.40B

Free Cash Flow

$372.00M

Financial Statements
Beta
Revenue$1.85B
Cost of Revenue$1.14B
Gross Profit$711.00M
R&D Expenses$269.00M
Operating Expenses$595.00M
Operating Income$116.00M
Interest Expense$5.00M
Net Income$83.00M
EPS (Basic)$0.06
EPS (Diluted)$0.06
Shares Outstanding (Basic)1.34B
Shares Outstanding (Diluted)1.35B

Key Highlights

  • 1Strong year-over-year revenue growth of 39% to $1.85 billion, indicating a significant market recovery.
  • 2Return to profitability with net income of $82.8 million, a substantial improvement from a net loss of $132.9 million in the prior year period.
  • 3Significant increase in new orders by 117% to $1.97 billion, primarily driven by the semiconductor and display equipment segments.
  • 4Gross margin improved substantially to 38.5% from 29.4% due to higher sales, favorable product mix, and cost management.
  • 5The company completed the acquisition of Semitool, Inc. for $323 million, enhancing its product offerings in the Silicon segment.
  • 6Management anticipates full-year fiscal 2010 net sales to be greater than fiscal 2009, signaling positive outlook.
  • 7Cash flow from operations was strong at $371.9 million, underscoring the company's ability to generate cash amidst recovery.

Frequently Asked Questions

The primary driver was a significant recovery in the semiconductor equipment industry, leading to a substantial increase in new orders (up 117%) and a corresponding surge in net sales (up 39%) driven by demand from memory and foundry customers. Improved factory utilization and a favorable product mix also contributed to higher gross margins.

Yes, Applied Materials completed the acquisition of Semitool, Inc. for $323 million in cash. This acquisition is expected to complement its existing product offerings and provide opportunities for future growth within the Silicon segment.

Management expressed a positive outlook, currently expecting net sales in fiscal year 2010 to be greater than net sales in fiscal 2009. This expectation is based on the improving global economic and industry conditions observed in the first quarter.

Applied Materials returned to profitability, reporting a net income of $82.8 million, or $0.06 per diluted share. This is a significant turnaround from the net loss of $132.9 million, or $(0.10) per diluted share, reported in the same quarter of the previous fiscal year.