Applied: Firing on all cylinders
2/22/2011 6:13 PM EST
SAN JOSE, Calif. - ''Applied Materials Inc. is firing on all cylinders for once,'' according to C.J. Muse, an analyst with Barclays Capital, in a new report.
Applied will report its results on Feb. 24. Muse is bullish about Applied's prospects after a period of lackluster performance. So where is Applied winning fab tool business?
Applied won CD-SEM business at Micron, according to the report from Barclays. The company won U-Vision 4 inspection ''shared or outright positions'' at Samsung's memory unit, Globalfoundries and TSMC, according to the report.
Applied won dielectric etch business at Samsung LSI. It won some silicon etch business at Toshiba and Samsung's memory unit. And it garnered some tungsten etch business at Samsung's memory unit and Hynix, according to the report.
Applied won some interconnect electrochemical plating (ECP) via Semitool (not 3-D TSV) at Samsung LSI, Elpida and Globalfoundries. It may garner a split position at Micron, according to the report. The fab tool firm won ECP business for 3-D TSV at Intel and TSMC, according to the report.
Applied garnered wins at Intel for PECVD. The fab tool giant garnered a PVD ''shared position'' in Samsung's unit memory and foundry as well as a ''position'' at Hynix, according to the firm.
Regarding Applied's upcoming results this week, ''we expect Applied to print inline January quarter results as we model $2.60 billion/$0.33 (consensus $2.59 billion/$0.33, guidance $2.45-$2.66 billion/$0.30-$0.34),'' Muse said.
''We model orders -9 percent quarter-over-quarter, led by weakness in (energy group) and LCD along with relatively flat (fab tool sector),'' he said. ''Looking ahead to the April quarter, we expect Applied revenues to be flattish, with an up 5 percent quarter-over-quarter (fab tool) trend driving better margins. Overall, for April quarter, we model revenue/EPS of $2.60 billion/$0.34 (consensus $2.48 billion/$0.31) and expect overall +5 percent order profile, helped by an increase in silicon, service, and LCD.''
Citing its fab tool business, Muse has increased his estimates for Applied. ''Based on trends that support better trends for silicon in the 2H over the 1H, led by capex plans from Toshiba Y5, Globalfoundries New York fab, and Intel, we tweak revenue estimates higher for silicon,'' he said.
''Likewise, checks also point to likely higher level of revenues in flat panel display in the 2H over 1H of 2011. Consequently, we raise estimates and model revenue/EPS of $10.7 billion/$1.50 verses consensus of $9.7 billion/$1.25 for CY11. For CY12 we model revenue/EPS of $10.9 billion/$1.65 verses consensus of $9.8 billion/$1.20,'' he said.