Online information source for semiconductor professionals

Applied Materials posted strong quarterly results that beat the analysts' estimates, reporting net sales of US$2.52 billion, operating profit of US$183 million, and net income of US$123 million or US$0.09 per share. Non-GAAP net income was US$234 million or US$0.17 per share. However the world's top supplier of semiconductor manufacturing equipment warned that sales of solar and energy equipment would decrease from 15% to make up 10% - 20% of company revenue this quarter due to strong Q3 results and looming feed-in tariff cuts.

Silicon Systems Group orders increased to $1.54 billion, net sales grew to $1.45 billion, and operating income rose to $525 million, or 36% of sales. New order composition was foundry 37%, DRAM 32%, logic and other 18%, and flash 13%.

Applied Global Services orders were $595 million, up 23% from the second quarter led by higher demand for 200mm refurbished equipment. AGS net sales increased to $468 million, and operating income decreased to $84 million.

 "Applied had strong results across our semiconductor, display and crystalline silicon solar businesses, and we now expect Silicon Systems Group net sales to be up by more than 160% over fiscal 2009," said Mike Splinter, chairman and CEO.

"During the quarter, we took actions that focus our Energy and Environmental Solutions segment on our most promising opportunities in solar and advanced energy, and strengthen our company's financial outlook."

The company's solar division saw net sales more than double from the fiscal second quarter to US$387 million, led by record demand for its crystalline silicon solar equipment.

Additional quarterly financial information

• Gross margin was 34.2% including the thin-film solar equipment inventory charge which lowered gross margin by approximately 10 percentage points.
• Operating cash flow was US$299 million for the quarter or 12% of sales, and operating cash flow for the nine months was US$1.20 billion or 18% of sales.
• Cash dividend payments totaled US$94 million.
• The company used US$100 million to repurchase 7.9 million shares of its common stock.
• Cash, cash equivalents and investments increased to US$3.63 billion at quarter end.
• The effective tax rate was 30.8%.
• Backlog increased by US$136 million to US$3.13 billion.