Applied Materials Inc. late Thursday announced results and an outlook that topped Wall Street estimates, but the stock didn’t start taking off until the company started shedding light on what is driving its strong forecast.
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On the call, Applied Materials Chief Executive Gary Dickerson said he sees long-term growth as the world becomes more digital, chip-making capacity becomes overburdened and supply issues plague end users.
“All the respective end-markets, NAND, DRAM, foundry-logic are strong,” Dickerson said on the call.
DRAM, or dynamic random access memory, is the type of memory commonly used in PCs and servers, while NAND stands for the flash memory chips used in USB drives and smaller devices, such as digital cameras. Foundry-logic represents third-party silicon-chip fabricators and chip makers with their own manufacturing facilities.
“We think we’re in the very early innings, this is going to be a decade-plus investment cycle,” Dickerson said. “Semiconductors are going to be on the key path of enabling some pretty major trends that play out around the world.”
The chip-industry supplier reported fiscal first-quarter net income of $ 1.13 billion, or $ 1.22 a share, compared with $ 892 million, or 96 cents a share, in the year-ago period. Adjusted earnings, which exclude items like restructuring and severance expenses and others, were $ 1.39 a share, compared with 98 cents a share in the year-ago period.
Revenue rose to $ 5.16 billion from $ 4.16 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast $ 1.28 a share on revenue of $ 4.98 billion.
Applied Materials forecast adjusted earnings of $ 1.44 to $ 1.56 a share on revenue of $ 5.19 billion to $ 5.59 billion for the second quarter. Analysts had estimated $ 1.28 a share on revenue of $ 4.96 billion.
