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Applied Materials 4Q net income declines

November 16, 2011

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SANTA CLARA, Calif.—Applied Materials Inc. said Wednesday that its fourth-quarter net income dipped 3 percent as demand fell for the chip equipment it manufactures. The company also predicted results for the current quarter that are lower than analysts expect.

Applied Materials serves as a barometer for technology spending because major makers of chips and LCD screens and even solar cells are big customers who depend on its equipment. The company's stock fell nearly 3 percent in after-hours trading.

For the quarter that ended in October, the company earned $456 million, or 34 cents per share. That compares with $468 million, or 35 cents per share, in the year-ago period.

Excluding one-time items, Applied Materials earned 21 cents per share -- 2 cents more than what analysts polled by FactSet expected.

Revenue dropped 25 percent to $2.18 billion, essentially matching analysts' expectations for $2.16 billion. The company said sales in its silicon systems group totaled $1.07 billion. Sales in its applied global services unit totaled $629 million, while sales were $315 million in the company's energy and environmental solutions business.

For the quarter that ends in January, Applied Materials predicted adjusted net income of 8 to 16 cents per share. The company also believes its revenue will fall 5 to 15 percent over the fourth quarter, which translates to an expectation for revenue of between $2.07 billion and $1.85 billion.

"While we expect the first half of fiscal 2012 to be impacted by the challenging economic environment, we anticipate that our overall business will strengthen during the second half of the year," Applied Materials CEO Mike Splinter said in a statement.

Analysts had been expecting adjusted net income of 18 cents per share on $2.10 billion in revenue.

For the full fiscal year, the company earned $1.93 billion, or $1.45 per share, on $10.52 billion in revenue. In fiscal 2010, the company earned $938 million, or 70 cents per share, on $9.55 billion in revenue.

Applied Materials shares fell 32 cents, or 2.6 percent, to $12.15 in after-hours trading. The stock finished regular trading down 17 cents at $12.47.