SAN JOSE, Calif. – As reported, Applied Materials Inc. posted strong results. Here’s what analysts are saying about the results:
C.J. Muse, an analyst with Barclays Capital (BC), said: ''Fueled by strength in silicon and EES, Applied reported a better January quarter with revenues/EPS of $2.69 billion/$0.36 (BC $2.60 billion/$0.33, consensus $2.59 billion/$0.33).
And then, (Applied) guided to solid upside for the April quarter of $2.69-2.82 billion/$0.34-0.38 (old $2.6 billion/$0.34, consensus $2.51 billion/$0.31). For FY11, management suggested a solid uptick into 2HCY11 with revenue above $11 billion (consensus $10.1 billion) and EPS above $1.50 (consensus $1.28).
Other key takeaways from (analysts) call: 1) Management raised WFE outlook to $34-36 billion from $28-$30 billion +/-10 percent, helped by a better 2H with what we think are orders from Toshiba Y5, Globalfoundries NY fab, Intel, and continued TSMC and Samsung spending; 2) EES profitability; 3) Expectations for continued improvement in AGS margins through CY11.''
Edwin Mok, an analyst with Needham & Co. LLC, said: ''Applied reported strong F1Q11 results and provided higher guidance. While the Street already expected a strong report, we see more upside to 2011 guidance based on our positive view of the semiconductor and c-Si solar capital spending cycles, and our expectation for LCD capex to rebound in C2H11.
For F2Q11, Applied expects revenue to grow 0-5 percent and non-GAAP EPS of $0.34-$0.38, above consensus revenue estimate of down 2.6 percent and EPS of $0.31. While FY2011 revenue/EPS outlook of more than $11 billion/$1.50 are above consensus, we believe these projections look conservative and are modeling above these levels. We believe Applied will experience stronger growth in F2H11 and into at least F1H12, driven by increased semi capex in C2011 and a LCD spending rebound by mid-CY11.
Display seeing incremental revenue opportunity from new mobile/tablet applications. While overall LCD capex is expected to decline 30 percent in C2011, management expects tool sales for mobile apps, such as OLED, to add ~$250 million to revenue this year. Combined with share gains in PVD, we feel confident that display revenue will rebound in F2H11.
Strong demand and improved profitability for EES. Strong demand for both Baccini systems and wafer saws drove January quarter revenue upside and an operating margn of 26 percent for EES. Based on several announcements of c-Si capacity expansions, we believe demand for c-Si equipment for the rest of C2011 will remain very strong, offsetting the decline in SunFab sales.''
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