At the same time, Applied projects that its sales will grow 5 percent in its third fiscal quarter over the second period. Orders are expected to jump 5 to 10 percent in the current period.

The company made the disclosures after reporting its results for the quarter. On Tuesday (May 18), Applied said net sales were $2.02 billion in the second fiscal quarter, up 30 percent from $1.56 billion for the first fiscal quarter of 2004, and up 82 percent from $1.11 billion for the second fiscal quarter of 2003.

Applied beat Wall Street's expectations in terms of earnings. Net income for the second fiscal quarter of 2004 was $373 million, or $0.22 per share, up from net income of $82 million, or $0.05 per share, for the first fiscal quarter of 2004, and up from a net loss of $62 million, or $0.04 per share, for the second fiscal quarter of 2003.

New orders of $2.21 billion for the second fiscal quarter of 2004 increased 32 percent from $1.68 billion for the first fiscal quarter of 2004, and increased 128 percent from $971 million for the second fiscal quarter of 2003.

For the third quarter, Applied projects that its sales will jump 5 percent sequentially. Earnings per share are projected to be from $0.23 to $0.25 in the third fiscal quarter. Orders are projected to increase 5 to 10 percent sequentially.

"The semiconductor market continues to be healthy," said Mike Splinter, president and chief executive officer of Applied. "We will continue to grow in the third quarter," he said in a conference call with analysts.

He attributed the growth to both the flat-panel display and IC equipment sectors. "Demand is strong [for flat-panel display equipment]," said Joe Bronson, chief financial officer of Applied. "The flat-panel equipment market is growing faster than the semiconductor market. We're booking [flat-panel equipment] into 2005."

Growth in Asia was strong, especially Japan and China. In fact, Applied expects to garner $1 billion worth of business in China alone in 2004, according to Splinter.

Applied declined to break out its quarterly China sales, but the company insisted it will hit the target this year. "We're pretty much on track," Bronson said.

Applied executives warned, however, that the semiconductor industry "is still underinvesting," as compared to other industries. The company is also seeing pent-up demand for 200-mm fab equipment despite huge investments for 300-mm plants. "We're also seeing 150-mm conversions," Bronson said.

It also expects growth in the 300-mm fab sector. Applied believes that there are 30 300-mm fabs in various stages of development. In 2005, there is expected to be 16 300-mm fab projects, with 19 shells in the works.

By: DocMemory
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