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- Second consecutive quarter with more than $2 billion in new orders
- Net sales of $1.97 billion up 25 percent sequentially
- Non-GAAP adjusted EPS of 16 cents exceeded high end of outlook; GAAP loss of 11 cents per share reflected impairment charges in Energy and Environmental Solutions |
SANTA CLARA, CA, May 17, 2013 - (ACN Newswire) - Applied Materials, Inc. (NASDAQ:AMAT), the global leader in manufacturing solutions for the semiconductor, display and solar industries, today reported results for its second quarter of fiscal 2013 ended April 28, 2013.
Applied generated orders of $2.27 billion, up 7 percent from the prior quarter, with Silicon Systems Group orders up 14 percent from the first quarter and Display orders up 41 percent sequentially. Net sales were $1.97 billion, up 25 percent sequentially.
Applied reported non-GAAP adjusted operating income of $285 million and non-GAAP adjusted net income of $199 million or 16 cents per diluted share. The company recorded a GAAP operating loss of $68 million and a GAAP net loss of $129 million or 11 cents per diluted share. The GAAP net loss included $278 million in goodwill and intangible asset impairment charges associated with the Energy and Environmental Solutions (EES) segment, which were primarily the result of the further deterioration in solar equipment market conditions, along with $10 million in charges related to previously announced restructuring plans. The company continues to aggressively reduce spending in the EES segment.
"For the second quarter in a row, Applied had strong order performance of over $2 billion," said Mike Splinter, chairman and chief executive officer. "We are seeing increasing pull from some of our largest strategic customers for our key enabling technologies. We remain committed to driving profitable growth."
Quarterly Results Summary
GAAP Results Q2 FY2013 Q1 FY2013 Q2 FY2012
----------------------------- -------------- --------------- -------------
Net sales $1.97 billion $1.57 billion $2.54 billion
Operating income (loss) $(68) million $39 million $409 million
Net income (loss) $(129) million $34 million $289 million
Diluted earnings (loss) per
share (EPS) $(0.11) $0.03 $0.22
Non-GAAP Adjusted Results
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Non-GAAP adjusted operating
income $285 million $112 million $490 million
Non-GAAP adjusted net income $199 million $69 million $349 million
Non-GAAP adjusted diluted EPS $0.16 $0.06 $0.27
Applied's non-GAAP adjusted results exclude the impact of the following, where applicable: certain discrete tax items; restructuring charges and any associated adjustments; certain acquisition-related costs; and impairments of assets, goodwill, or investments. A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also "Use of Non-GAAP Adjusted Financial Measures" below.
Second Quarter Reportable Segment Results and Comparisons to the Prior Quarter
Silicon Systems Group (SSG) orders were $1.55 billion, up 14 percent, with growth primarily driven by memory. Net sales were $1.29 billion, up 33 percent, led by foundry. Non-GAAP adjusted operating income increased to $329 million or 25.5 percent of net sales. GAAP operating income increased to $283 million or 21.9 percent of net sales. New order composition was: foundry 66 percent; logic/other 13 percent; flash 11 percent; and DRAM 10 percent.
Applied Global Services (AGS) orders were $481 million, down 12 percent primarily due to the timing of service contract renewals which are typically concentrated in the first fiscal quarter. Net sales were $517 million, up 10 percent. Non-GAAP adjusted operating income increased to $120 million and rose by 3.9 points to 23.2 percent of net sales. GAAP operating income increased to $118 million or 22.8 percent of net sales.
Display orders were $195 million, up 41 percent driven by the initial recovery in TV equipment investment. Net sales were $127 million, up 46 percent. Non-GAAP adjusted operating income increased to $21 million or 16.5 percent of net sales. GAAP operating income increased to $19 million or 15.0 percent of net sales.
Energy and Environmental Solutions (EES) orders were $39 million, down 43 percent. Net sales were $38 million, down 17 percent. EES had a non-GAAP adjusted operating loss of $34 million; EES recorded a GAAP operating loss of $322 million, which included impairment charges of $278 million.
Additional Quarterly Financial Information
-- Backlog increased by 9 percent sequentially to $2.30 billion including negative adjustments of $102 million.
-- Gross margin was 43.2 percent on a non-GAAP adjusted basis, up from 39.8 percent in the prior quarter reflecting higher net sales and lower inventory charges. GAAP gross margin was 41.0 percent.
-- RD&E increased by $40 million or 13 percent sequentially. On a year-over-year basis, RD&E as a proportion of RD&E plus SG&A increased by 5 points to 59 percent, reflecting the impact of structural changes aimed at funding growth initiatives.
-- The effective tax rate was 24.9 percent on a non-GAAP adjusted basis. The GAAP effective tax rate was (43.3) percent, reflecting the effects of the goodwill impairment charge, which were not deductible.
-- The company paid $108 million in cash dividends and used $100 million to repurchase 8 million shares of its common stock.
-- Cash, cash equivalents and investments ended the quarter at $2.85 billion, up slightly from the prior quarter.
Business Outlook
For the third quarter of fiscal 2013, Applied expects net sales to be up slightly from the previous quarter. The company expects non-GAAP adjusted EPS to be in the range of $0.16 to $0.20. The non-GAAP adjusted EPS outlook excludes known charges related to completed acquisitions of approximately $0.04 per share but does not exclude other non-GAAP adjustments that may arise subsequent to this release.
Use of Non-GAAP Adjusted Financial Measures
Management uses non-GAAP adjusted 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 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 at www.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding Applied's performance, customer demand, industry conditions, market outlooks, and business outlooks for the third quarter of fiscal 2013, as well as 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, end-demand for electronic products and semiconductors, and customers' new technology and capacity requirements; variability of operating expenses and results among the company's segments caused by differing conditions in the served markets; the concentrated nature of Applied's customer base; Applied's ability to (i) develop, deliver and support a broad range of products, expand its markets and develop new markets, (ii) timely align its cost structure with business conditions and achieve the intended objectives of cost-reduction activities, (iii) plan and manage its resources and production capability, (iv) obtain and protect intellectual property rights in key technologies, (v) attract, motivate and retain key employees, and (vi) accurately forecast future results, which depends on multiple assumptions related to, without limitation, market conditions, customer requirements and business needs; and other risks described in Applied's SEC filings, including its most recent Form 10-Q. 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. Learn more at www.appliedmaterials.com.
Contact:
Kevin Winston (editorial/media) +1-408-235-4498
Michael Sullivan (financial community) +1-408-986-7977
Press Release: http://bit.ly/11Ii5a7
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(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Applied Materials via Thomson Reuters ONE
Topic: Earnings
Source: Applied Materials, Inc.
https://www.acnnewswire.com
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