Applied Materials to Report Fiscal Third-Quarter Earnings: What to Expect
Key Takeaways
- Applied Materials is set to report fiscal third-quarter earnings on August 15.
- Analysts expect the semiconductor equipment maker to post year-over-year growth in revenue and earnings.
- Investors will likely be watching for updates on the company’s China sales and the impact of customer Intel’s plans to cut costs.
Applied Materials (AMAT) is scheduled to release its fiscal third-quarter earnings after the bell on August 15, with investors eagerly awaiting updates on the company’s China sales and the potential impact of customer Intel’s (INTC) plans to cut costs.
According to estimates compiled by Visible Alpha, analysts expect Applied Materials to report revenue of $6.69 billion for the quarter, up from $6.43 billion in the same period last year. Net income is projected to come in at $1.67 billion or $2 per share, representing growth from the year-ago period but a sequential decline.
| Analyst Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
| Revenue | $6.69 billion | $6.65 billion | $6.43 billion |
| Diluted Earnings Per Share | $2 | $2.06 | $1.85 |
| Net Income | $1.67 billion | $1.72 billion | $1.56 billion |
Key Metrics: China Sales
One of the key metrics investors will be closely watching is how much of Applied Materials’ sales came from the China market. This information could provide greater insight into how geopolitical tensions and potentially tighter curbs on exports to China could affect the company.
Analysts anticipate revenue for the China region to be $2.36 billion, accounting for 35.3% of the company’s expected total revenue. UBS analysts predict that China sales as a share of total revenue could normalize at 30% by the end of the calendar year, down from 43% in the fiscal second quarter.
The analysts believe that demand will remain strong in the second half of the year, and they expect guidance to show an upside as Chinese companies procure equipment in the near term ahead of potential export restrictions. Consensus estimates project fourth-quarter revenue guidance to come in at $6.91 billion.
Citi analysts caution that Applied Materials stock may experience volatility leading up to the US elections due to uncertainty surrounding possible tougher restrictions.
Business Spotlight: Cost Cuts by Intel
Another area of interest for investors is how planned cost cuts by Intel, one of Applied Materials’ customers, might affect the company.
Citi analysts have lowered their estimates for Applied Materials, citing Intel’s lowered capital expenses (CapEx) outlook among other reasons. Intel recently reported wider-than-expected losses and announced layoffs to trim spending.
Despite these factors, Applied Materials’ stock has gained about 18% since the start of the year, reaching $191.67 as of 2:20 p.m. ET on Friday.
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