Semiconductor machinery manufacturer Applied Materials (NASDAQ:AMAT) will be reporting earnings this Thursday after market close. Here’s what to look for.
Applied Materials beat analysts’ revenue expectations by 2.2% last quarter, reporting revenues of $6.8 billion, down 3.5% year on year. It was a satisfactory quarter for the company, with a beat of analysts’ EPS estimates but an increase in its inventory levels.
Is Applied Materials a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting Applied Materials’s revenue to decline 3.9% year on year to $6.89 billion, a reversal from the 6.8% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.21 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Applied Materials has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.4% on average.
Looking at Applied Materials’s peers in the semiconductor manufacturing segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Teradyne delivered year-on-year revenue growth of 43.9%, beating analysts’ expectations by 11%, and Kulicke and Soffa reported revenues up 20.2%, topping estimates by 5%. Teradyne traded up 13.4% following the results while Kulicke and Soffa was also up 19.3%.
Read our full analysis of Teradyne’s results here and Kulicke and Soffa’s results here.
There has been positive sentiment among investors in the semiconductor manufacturing segment, with share prices up 10.2% on average over the last month. Applied Materials is up 7.7% during the same time and is heading into earnings with an average analyst price target of $335.21 (compared to the current share price of $329.97).
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