APPLIED MATERIALS FIRST QUARTER RESULTS EXCEED EXPECTATIONS
(Thomson Reuters ONE) -
* Expects record net sales of more than $11 billion and non-GAAP EPS of more
than $1.50 in fiscal 2011
* Raises wafer fab equipment market forecast for calendar 2011 to between $34-
36 billion
* Strong solar equipment sales drove record EES operating profit in Q1
* Q1 EPS of $0.38; Q1 non-GAAP EPS of $0.36 exceeded target range by $0.02
* Non-GAAP EPS grew 177% year over year
SANTA CLARA, Calif., Feb. 24, 2011 -- Applied Materials, Inc. (NASDAQ: AMAT),
the world's leading supplier of manufacturing solutions for the semiconductor,
display and solar industries, today reported results for its first quarter of
fiscal 2011 ended Jan. 30, 2011. Applied generated orders of $2.97 billion, net
sales of $2.69 billion, operating income of $674 million, and net income of $506
million or $0.38 per share. Non-GAAP operating income was $659 million, and non-
GAAP net income was $484 million or $0.36 per share.
"Applied's solid first quarter was driven by continued strength in semiconductor
systems and record profitability in solar," said Mike Splinter, chairman and
chief executive officer. "We see momentum building in our end markets and expect
our company's fiscal year revenue to be more than $11 billion, exceeding our
previous record by over a billion dollars. We now expect wafer fab equipment
spending to be up 10 to 15 percent from approximately $31 billion in calendar
2010, with crystalline silicon solar equipment spending rising by more than 30
percent year over year."
"On a year-over-year basis, our non-GAAP earnings per share grew more than 170
percent on a 45 percent increase in net sales, demonstrating our focus on
operating efficiencies and profitability improvement," said George Davis,
executive vice president and chief financial officer. "With the improving market
outlook, we expect to deliver record non-GAAP earnings of more than $1.50 per
share in fiscal 2011."
Financial Results Summary
+-----------------------------+---------------+---------------+---------------+
| GAAP Results | Q1 FY2011 | Q4 FY2010 | Q1 FY2010 |
+-----------------------------+---------------+---------------+---------------+
| Net sales | $2.69 billion | $2.89 billion | $1.85 billion |
+-----------------------------+---------------+---------------+---------------+
| Operating income | $674 million | $699 million | $116 million |
+-----------------------------+---------------+---------------+---------------+
| Net income | $506 million | $468 million | $83 million |
+-----------------------------+---------------+---------------+---------------+
| Earnings per share | $0.38 | $0.35 | $0.06 |
+-----------------------------+---------------+---------------+---------------+
| Non-GAAP Results | | | |
+-----------------------------+---------------+---------------+---------------+
| Non-GAAP operating income | $659 million | $710 million | $256 million |
+-----------------------------+---------------+---------------+---------------+
| Non-GAAP net income | $484 million | $476 million | $179 million |
+-----------------------------+---------------+---------------+---------------+
| Non-GAAP earnings per share | $0.36 | $0.36 | $0.13 |
+-----------------------------+---------------+---------------+---------------+
The non-GAAP results exclude the impact of the following, where applicable:
restructuring and asset impairment charges and any associated adjustment related
to restructuring actions, certain discrete tax items, certain acquisition-
related costs, investment impairments, and gain or loss on sale of facilities. A
reconciliation of the GAAP and non-GAAP results is provided in the financial
statements included in this release. See also "Use of Non-GAAP Financial
Measures" below.
Reportable Segment Results
Silicon Systems Group (SSG) orders were $1.61 billion in the first quarter, down
4 percent from the fourth quarter of fiscal 2010. Net sales increased to $1.50
billion, up 1 percent. Operating income decreased by 4 percent from the fourth
quarter to $543 million or 36 percent of net sales. New order composition was:
foundry 54 percent, logic and other 23 percent, DRAM 13 percent, and flash 10
percent.
Applied Global Services (AGS) orders were $552 million in the first quarter,
down 13 percent from the fourth quarter of fiscal 2010. Net sales increased to
$567 million, up 10 percent from the fourth quarter, led by higher shipments of
200mm equipment. Operating income decreased to $85 million or 15 percent of net
sales as a result of lower margins on 200mm equipment.
Display orders declined 19 percent from the fourth quarter of fiscal 2010 to
$142 million. Net sales were $147 million, down 48 percent from the fourth
quarter, primarily driven by a cyclical decline in LCD equipment demand.
Operating income decreased to $28 million or 19 percent of net sales.
Energy and Environmental Solutions (EES) had record orders of $668 million in
the first quarter, up 22 percent from the fourth quarter of fiscal 2010. Net
sales were $476 million, down 22 percent from the fourth quarter which included
$230 million in thin film equipment sales. Net sales of crystalline silicon
equipment set a record in the first quarter. Operating income increased to $144
million or 30 percent of net sales and included a favorable adjustment of $28
million related to a previously announced restructuring program. Excluding this
adjustment, operating income would have been 24 percent of net sales.
Additional Quarterly Financial Information
* Gross margin was 42.3 percent, slightly higher than 42.2 percent in the
fourth quarter.
* Operating cash flow was $425 million or 16 percent of net sales.
* Cash dividend payments totaled $93 million.
* The company used $150 million to repurchase 10.9 million shares of its
common stock.
* Cash, cash equivalents and investments increased to $4.10 billion at quarter
end.
* The effective tax rate was 25.5 percent and included a benefit related to
the reinstatement of the federal R&D tax credit, which lowered the rate by
1.9 points.
* Backlog increased by $292 million to $3.54 billion.
Business Outlook
For the second quarter of fiscal 2011, Applied expects net sales to be in the
range of flat to up 5 percent quarter over quarter. The company expects non-GAAP
EPS to be in the range of $0.34 to $0.38, which excludes known charges related
to completed acquisitions of approximately $0.01 per share. The expected full-
year non-GAAP EPS of $1.50 excludes known charges related to completed
acquisitions of approximately $0.04 per share along with favorable adjustments
of $0.02 per share related to previously announced restructurings and the
reinstatement of the federal R&D tax credit. The non-GAAP EPS amounts do not
take into account other non-GAAP adjustments that may arise subsequent to this
release.
Use of Non-GAAP Financial Measures
Management uses non-GAAP results to evaluate the company's operating and
financial performance in light of business objectives and for planning purposes.
These measures are not in accordance with GAAP and may differ from non-GAAP
methods of accounting and reporting used by other companies. Applied Materials
believes these measures enhance investors' ability to review the company's
business from the same perspective as the company's management and facilitate
comparisons of this period's results with prior periods. The presentation of
this additional information should not be considered a substitute for results
prepared in accordance with GAAP.
Webcast Information
Applied Materials will discuss these results during an earnings call that begins
at 1:30 p.m. Pacific Time today. A live webcast will be available
atwww.appliedmaterials.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements
regarding Applied's performance, products, end markets, wafer fab and solar
equipment spending outlooks, profitability, fiscal 2011 revenue and earnings
expectations, and second quarter of fiscal 2011 business outlook. Forward-
looking statements may contain words such as "expect," "believe," "may," "can,"
"should," "will," "forecast," "anticipate" or similar expressions, and include
the assumptions that underlie such statements. These statements are subject to
known and unknown risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by such statements, including
but not limited to: the level of demand for Applied's products, which is subject
to many factors, including uncertain global economic and industry conditions,
business and consumer spending, demand for electronic products and
semiconductors, government renewable energy policies and incentives, and
customers' utilization rates and new technology and capacity requirements;
variability of operating expenses and results among the company's segments
caused by differing conditions in the served markets; Applied's ability to (i)
develop, deliver and support a broad range of products, expand its markets and
develop new markets, (ii) timely implement effective cost reduction programs,
realize expected benefits, and align its cost structure with business
conditions, (iii) plan and manage its resources and production capability,
including its supply chain, (iv) implement initiatives that enhance global
operations and efficiencies, (v) maintain effective internal controls and
procedures, (vi) obtain and protect intellectual property rights in key
technologies, (vii) attract, motivate and retain key employees, and (viii)
accurately forecast future operating and financial results, which depends on
multiple assumptions related to, without limitation, market conditions, customer
requirements and business needs; and other risks described in Applied Materials'
SEC filings. All forward-looking statements are based on management's estimates,
projections and assumptions as of the date hereof. The company undertakes no
obligation to update any forward-looking statements.
About Applied Materials
Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in providing
innovative equipment, services and software to enable the manufacture of
advanced semiconductor, flat panel display and solar photovoltaic products. Our
technologies help make innovations like smartphones, flat screen TVs and solar
panels more affordable and accessible to consumers and businesses around the
world. At Applied Materials, we turn today's innovations into the industries of
tomorrow. Learn more atwww.appliedmaterials.com.
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
Three Months Ended
(In millions, except per share amounts) January 30, January 31,
2011 2010
--------------------------------------------------------------------------------
Net sales $ 2,686 $ 1,849
Cost of products sold 1,550 1,138
Gross margin 1,136 711
Operating expenses:
Research, development and engineering 270 269
General and administrative 112 125
Marketing and selling 109 97
Restructuring and asset impairments (29) 104
Total operating expenses 462 595
Income from operations 674 116
Interest expense 5 5
Interest and other income 11 8
Income before income taxes 680 119
Provision for income taxes 174 36
Net income $ 506 $ 83
Earnings per share:
Basic and Diluted $ 0.38 $ 0.06
Weighted average number of shares:
Basic 1,324 1,342
Diluted 1,335 1,350
--------------------------------------------------------------------------------
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
--------------------------------------------------------------------------------
(In millions) January 30, October 31,
2011 2010
--------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,974 $ 1,858
Short-term investments 772 727
Accounts receivable, net 1,946 1,831
Inventories 1,647 1,547
Deferred income taxes, net 512 513
Other current assets 291 289
Total current assets 7,142 6,765
Long-term investments 1,351 1,307
Property, plant and equipment, net 893 963
Goodwill, net 1,336 1,336
Purchased technology and other 273 287
intangible assets, net
Deferred income taxes and other 279 285
assets
Total assets $ 11,274 $ 10,943
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1 $ 1
Accounts payable and accrued 1,582 1,766
expenses
Customer deposits and deferred 1,055 847
revenue
Income taxes payable 276 274
Total current liabilities 2,914 2,888
Long-term debt 204 204
Employee benefits and other 317 315
liabilities
Total liabilities 3,435 3,407
Total stockholders' equity 7,839 7,536
Total liabilities and stockholders' $ 11,274 $ 10,943
equity
--------------------------------------------------------------------------------
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
Three Months Ended
(In millions) January 30, January 31,
2011 2010
--------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 506 $ 83
Adjustments required to reconcile net
income to cash provided by (used in) operating
activities:
Depreciation and amortization 63 76
Loss on fixed asset retirements 1 4
Provision for bad debts - 6
Restructuring and asset impairments (29) 104
Deferred income taxes 10 (44)
Net recognized loss on investments 4 6
Equity-based compensation 33 34
Net change in operating assets and liabilities, (163) 103
net of amounts acquired
Cash provided by operating activities 425 372
Cash flows from investing activities:
Capital expenditures (24) (53)
Proceeds from sale of facility 39 -
Cash paid for acquisition, net of cash acquired - (323)
Proceeds from sales and maturities of 443 184
investments
Purchases of investments (537) (297)
Cash used in investing activities (79) (489)
Cash flows from financing activities:
Debt borrowings - 1
Proceeds from common stock issuances 13 20
Common stock repurchases (150) -
Payment of dividends to stockholders (93) (81)
Cash used in financing activities (230) (60)
Increase (decrease) in cash and cash equivalents 116 (177)
Cash and cash equivalents - beginning of period 1,858 1,576
Cash and cash equivalents - end of period $ 1,974 $ 1,399
Supplemental cash flow information:
Cash payments (refunds) for income taxes $164 $(33)
Reportable Segment Results
+------------+-----------------------+-----------------------+-----------------------+
| | Q1 FY2011 | Q4 FY2010 | Q1 FY2010 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|(In | New | Net |Operating| New | Net |Operating| New | Net |Operating|
|millions) |Orders|Sales | Income |Orders|Sales | Income |Orders|Sales | Income |
| | | | (Loss) | | | (Loss) | | | (Loss) |
+------------+------+------+---------+------+------+---------+------+------+---------+
|SSG |$1,610|$1,496| $543 |$1,673|$1,483| $564 |$1,135| $970 | $306 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|AGS | $552 | $567 | $85 | $631 | $516 | $100 | $474 | $426 | $63 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Display | $142 | $147 | $28 | $175 | $281 | $89 | $126 | $132 | $25 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|EES | $668 | $476 | $144 | $546 | $606 | $86 | $230 | $321 | ($36) |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Corporate | - | - | ($126) | - | - | ($140) | - | - | ($242) |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Consolidated|$2,971|$2,686| $674 |$3,026|$2,886| $699 |$1,965|$1,849| $116 |
+------------+------+------+---------+------+------+---------+------+------+---------+
Corporate Unallocated Expenses
+------------------------------------------+-----------+-----------+-----------+
| (In millions) | Q1 FY2011 | Q4 FY2010 | Q1 FY2010 |
+------------------------------------------+-----------+-----------+-----------+
| Restructuring and asset impairments, net | ($1) | $- | $104 |
+------------------------------------------+-----------+-----------+-----------+
| Share-based compensation | $33 | $31 | $34 |
+------------------------------------------+-----------+-----------+-----------+
| Other unallocated expenses | $94 | $109 | $104 |
+------------------------------------------+-----------+-----------+-----------+
| Corporate | $126 | $140 | $242 |
+------------------------------------------+-----------+-----------+-----------+
Additional Information
+---------------+--------------------+--------------------+--------------------+
| | Q1 FY2011 | Q4 FY2010 | Q1 FY2010 |
+---------------+--------------------+--------------------+--------------------+
|New Orders and Net Sales by Geography |
+---------------+----------+---------+----------+---------+----------+---------+
|(In $ millions)|New Orders|Net Sales|New Orders|Net Sales|New Orders|Net Sales|
+---------------+----------+---------+----------+---------+----------+---------+
|North America | 679 | 610 | 450 | 380 | 256 | 241 |
+---------------+----------+---------+----------+---------+----------+---------+
|% of Total | 23 | 23 | 15 | 13 | 13 | 13 |
+---------------+----------+---------+----------+---------+----------+---------+
|Europe | 346 | 278 | 327 | 223 | 146 | 310 |
+---------------+----------+---------+----------+---------+----------+---------+
|% of Total | 12 | 10 | 11 | 8 | 7 | 17 |
+---------------+----------+---------+----------+---------+----------+---------+
|Japan | 187 | 166 | 173 | 158 | 178 | 174 |
+---------------+----------+---------+----------+---------+----------+---------+
|% of Total | 6 | 6 | 6 | 5 | 9 | 9 |
+---------------+----------+---------+----------+---------+----------+---------+
|Korea | 225 | 169 | 237 | 407 | 387 | 331 |
+---------------+----------+---------+----------+---------+----------+---------+
|% of Total | 8 | 6 | 8 | 14 | 20 | 18 |
+---------------+----------+---------+----------+---------+----------+---------+
|Taiwan | 745 | 635 | 713 | 829 | 658 | 514 |
+---------------+----------+---------+----------+---------+----------+---------+
|% of Total | 25 | 24 | 23 | 29 | 34 | 28 |
+---------------+----------+---------+----------+---------+----------+---------+
|Southeast Asia | 135 | 154 | 152 | 175 | 125 | 136 |
+---------------+----------+---------+----------+---------+----------+---------+
|% of Total | 4 | 6 | 5 | 6 | 6 | 7 |
+---------------+----------+---------+----------+---------+----------+---------+
|China | 654 | 674 | 974 | 714 | 215 | 143 |
+---------------+----------+---------+----------+---------+----------+---------+
|% of Total | 22 | 25 | 32 | 25 | 11 | 8 |
+---------------+----------+---------+----------+---------+----------+---------+
| |
+------------------------------------------------------------------------------+
|Employees (In thousands) |
+---------------+--------------------+--------------------+--------------------+
|Regular Full | 13.0 | 13.0 | 13.0 |
|Time | | | |
+---------------+--------------------+--------------------+--------------------+
APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
--------------------------------------------------------------------------------
Three Months
Ended
January October 31, January
30, 31,
(In millions, except per 2011 2010 2010
share amounts)
--------------------------------------------------------------------------------
Non -GAAP Operating Income
Reported operating income $ 674 $ 699 $ 116
(GAAP basis)
Certain items associated 13 14 26
with acquisitions[1]
Semitool deal cost - - 10
Restructuring and asset (29) (2) 104
impairments [2],[3],[4]
Loss on sale of facility 1 - -
Non -GAAP operating income $ 659 $ 710 $ 256
Non -GAAP Net Income
Reported net income (GAAP $ 506 $ 468 $ 83
basis)
Certain items associated 13 14 26
with acquisitions[1]
Semitool deal cost - - 10
Restructuring and asset (29) (2) 104
impairments [2],[3],[4]
Impairment of strategic - - 1
investments
Loss on sale of facility 1 - -
Reinstatement of federal (13) - -
R&D tax credit
Income tax effect of non- 6 (4) (45)
GAAP adjustments
Non -GAAP net income $ 484 $ 476 $ 179
Non -GAAP Net Income Per
Diluted Share
Reported net income per
diluted share
(GAAP basis) $ 0.38 $ 0.35 $ 0.06
Certain items associated 0.01 0.01 0.01
with acquisitions
Semitool deal cost - - 0.01
Restructuring and asset (0.01) - 0.05
impairments
Impairment of strategic - - -
investments
Loss on sale of facility - - -
Reinstatement of federal (0.01) - -
R&D tax credit
Non -GAAP net income - per $ 0.36 $ 0.36 $ 0.13
diluted share
Shares used in diluted 1,335 1,340 1,350
shares calculation
[1] These items are incremental charges attributable to acquisitions consisting
of inventory fair value adjustments on products sold and amortization of
purchased intangible assets.
[2] Results for the three months ended January 30, 2011 included asset
impairment charges of $3 million related to a facility held-for-sale, offset by
favorable adjustments of $28 million related to a restructuring program
announced on July 21, 2010, and $4 million related to a restructuring program
announced on November 12, 2008.
[3] Results for the three months ended October 31, 2010 included a $2 million
reinstatement of certain fixed assets that were previously impaired in the EES
restructuring plan announced on July 21, 2010.
[4] Results for the three months ended January 31, 2010 included restructuring
charges of $104 million associated with a restructuring program announced on
November 11, 2009.
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Applied Materials via Thomson Reuters ONE
[HUG#1491914]
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Datum: 24.02.2011 - 22:04 Uhr
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