Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Applied Materials (NASDAQ:AMAT), and the best and worst performers in the semiconductor manufacturing group.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers and data storage. The growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 4 semiconductor manufacturing stocks we track reported a weak Q1; on average, revenues missed analyst consensus estimates by 0.16%, while on average next quarter revenue guidance was 1.75% under consensus. Technology stocks have been hit hard on fears of higher interest rates, but semiconductor manufacturing stocks held their ground better than others, with share price down 7.72% since earnings, on average.
Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.24 billion, up 11.8% year on year, missing analyst expectations by 1.63%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.
“Demand for Applied Materials’ products and services has never been stronger, yet we remain constrained by on-going supply chain issues,” said Gary Dickerson, President and CEO.
The stock is down 10.9% since the results and currently trades at $98.57.
Is now the time to buy Applied Materials? Access our full analysis of the earnings results here, it's free.
Best Q1: KLA Corporation (NASDAQ:KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $2.28 billion, up 26.8% year on year, beating analyst expectations by 3.84%. It was a decent quarter for the company, with a beat on the bottom line but an increase in inventory levels.
KLA Corporation achieved the strongest analyst estimates beat among its peers. The stock is up 2.15% since the results and currently trades at $340.16.
Is now the time to buy KLA Corporation? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Lam Research (NASDAQ:LRCX)
Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $4.06 billion, up 5.52% year on year, missing analyst expectations by 4.33%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in operating margin.
Lam Research had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 5.75% since the results and currently trades at $455.
Read our full analysis of Lam Research's results here.
Marvell Technology (NASDAQ:MRVL)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.44 billion, up 73.8% year on year, beating analyst expectations by 1.46%. It was a mixed quarter for the company, with exceptional revenue growth but an increase in inventory levels.
Marvell Technology delivered the fastest revenue growth among the peers. The stock is down 16.3% since the results and currently trades at $47.65.
Read our full, actionable report on Marvell Technology here, it's free.
The author has no position in any of the stocks mentioned