Applied Materials (AMAT) Q3 Earnings & Revenues Top Estimates
Zacks Investment Research | Aug 15, 2019 10:40PM ET
Applied Materials Inc. (NASDAQ:AMAT) delivered fiscal third-quarter 2019 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 4 cents and improved 5.7% sequentially. However, the figure declined 28.8% year over year.
Net sales of $3.562 billion surpassed the Zacks Consensus Estimate of $3.526 billion and were within management’s guided range of $3.375-$3.675 billion. The figure improved marginally 0.6% from the previous quarter but decreased 14.4% from the year-ago quarter.
Year-over-year decline was owing to market uncertainties which in turn led to weak segmental performance. Moreover, softness in semiconductor and display markets on account of slowdown in memory and display customers’ spending was a major headwind.
Nevertheless, the company witnessed solid momentum across United States and Taiwan.
Coming to price performance, Applied Materials has returned 44% on a year-to-date basis, outperforming the Applied Materials, Inc. Quote
Operating Results
Non-GAAP gross margin was 44%, contracting 190 bps from the year-ago quarter.
Applied Materials’ adjusted operating expenses as a percentage of net sales expanded 250 bps on a year-over-year basis to 20.9%.
Further, non-GAAP operating margin of 23% in the reported quarter contracted significantly by 440 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Jul 28, 2019, cash and cash equivalent balance was $3.01 billion compared with $3.12 billion as of Apr 28, 2019. Inventories were $3.54 billion compared with $3.68 billion in the prior quarter. Accounts receivables improved to $2.37 billion from $2.26 billion in the fiscal second quarter.
The company returned $528 million and $196 million through stock repurchases and cash dividends, respectively.
Notably, Applied Materials generated $787 million, down from $800 million in the previous quarter.
Guidance
For fourth-quarter fiscal 2019, Applied Materials expects net sales between $3.535 billion and $3.835 billion. The Zacks Consensus Estimate for the same is pegged at $3.68 billion.
Non-GAAP EPS is expected in the range of 72-80 cents. The corresponding Zacks Consensus Estimate is pegged at 76 cents per share.
Zacks Rank & Stocks to Consider
Applied Materials currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Anixter International (NYSE:AXE) , LogMeIn (NASDAQ:LOGM) and Perficient (NASDAQ:PRFT) , each flaunting a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research
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