Applied Materials (AMAT) Q3 Earnings: What To Expect

Max Juang /
2023/08/16 8:05 am EDT

Maker of machinery employed in semiconductor manufacturing, Applied Materials (NASDAQ:AMAT) will be announcing earnings results tomorrow after the bell. Here's what you need to know.

Last quarter Applied Materials reported revenues of $6.63 billion, up 6.16% year on year, beating analyst revenue expectations by 4.07%. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates and optimistic revenue guidance for the next quarter.

Is Applied Materials buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Applied Materials's revenue to decline 5.24% year on year to $6.18 billion, a deceleration on the 5.23% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.75 per share.

Applied Materials Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

Looking at Applied Materials's peers in the semiconductor manufacturing segment, some of them have already reported Q3 earnings results, giving us a hint what we can expect. IPG Photonics's revenues decreased 9.83% year on year, missing analyst estimates by 1.79%,  and KLA Corporation reported revenue decline of 5.29% year on year, exceeding estimates by 4.19%. IPG Photonics traded down 1.45% on the results, and KLA Corporation was up 4.02%.

Read our full analysis of IPG Photonics's results here and KLA Corporation's results here.

Tech stocks have been facing declining investor sentiment since 2022 and while some of the semiconductor manufacturing stocks have fared somewhat better, they have not been spared, with share price declining 8.46% over the last month. Applied Materials is down 2.84% during the same time, and is heading into the earnings with analyst price target of $144.5, compared to share price of $140.59.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.