SAN FRANCISCO—Chip and solar equipment vendor Applied Materials Wednesday (Feb. 13) posted quarterly sales that declined on both a sequential and annual basis but still topped Wall Street’s expectations.
Applied executives reported that the company has made progress in reorganizing to focus investment in areas where it can achieve sustainable growth and expressed optimism about growth in 2013.
“Overall, I’m pleased with how we navigated the bottom of this industry investment cycle and with our semiconductor orders up over 80 percent in the first quarter, we’re more optimistic about the potential of our markets this year,” said Mike Splinter, Applied’s chairman and CEO, in a conference call with analysts following the report.
Applied (Santa Clara, Calif.) posted sales of $1.57 billion for the quarter, down 5 percent compared with the previous quarter and down 28 percent from the year-ago quarter. The company reported a net income of $34 million, or 3 cents per share, compared to a net loss of $515 million in the previous quarter and a net income of $117 million in the year-ago quarter.
Applied said it booked $2.11 billion in orders in the quarter, up from $1.47 billion in the previous quarter.
Executives said Applied, which last October cut 1,300 jobs, had implemented organizational changes over the past three months to strengthen its teams and redeploy investments. As a result, said Gary Dickerson, Applied’s president, the company is shifting about $200 million in investment into strategically identified areas.
“Our strategy is to focus on allocating the appropriate level of investments to market segments where we believe we can achieve a leadership position,” Dickerson said. “This means ramping investment in some areas, while reducing or eliminating investments in others.”
Dickerson said Applied continues to reduce investment in its solar panel manufacturing equipment division, with a goal of cutting the division’s operating expenses to a run rate below $25 million per quarter. “We continue to invest what we can provide differentiated technology to enable higher sell efficiencies and lower cost per watt and remain confident that this business can deliver long-term profitable growth for Applied,” Dickerson said.
For its fiscal second quarter, Applied said it expects sales to increase 15 to 25 percent to between $1.8 billion and $1.96 billion.