Applied Materials Posts $55 Million Q3 Loss on Much Lower Revenue (AMAT)

Semiconductor equipment maker Applied Materials, Inc. (AMAT) said late Tuesday that it lost $55 million in the fiscal third quarter, hurt by sharply lower revenue.

The Santa Clara-based company reported a fiscal third quarter net loss of $54.9 million, or 4 cents per share, compared with a profit of $164.8 million, or 12 cents per share. Excluding one-time items, Applied Materials saw an adjusted loss of $2 million, or about break-even on per-share basis.

Revenue plummeted 39% to $1.13 billion from $1.85 billion last year.

The results were still enough to beat analyst estimates. On average, Wall Street analysts expected a bigger loss of 8 cents per share, on lower revenue of $958 million.

Looking ahead, the company forecast a fiscal fourth quarter break-even to a profit of 4 cents per share, on 10% to 20% revenue growth. This outlook is much better than that of analysts, who see a loss of 5 cents per share on 4.8% lower revenue.

Applied Materials shares rose 17 cents, or +1.3%, in morning trading Wednesday.

The Bottom Line

We have avoided shares of AMAT, since our early June coverage began and the stock was trading at $18.89. The company has a 1.82% dividend yield, based on last night's closing stock price of $13.22. The stock has near-term technical support in the $10.00-$10.50 price area. If the shares can firm up, we see overhead resistance around the $14-$16 price levels. We would remain on the sideline for now.

Applied Materials, Inc. (AMAT) is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 out of 5 stars.

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