Applied Material reported sales of $1.63 billion in its third fiscal quarter, down 12 percent from $1.86 billion for the second fiscal quarter of 2005, and down 27 percent from $2.24 billion for the third fiscal quarter of 2004.

Net income for the third fiscal quarter of 2005 was $370 million, or $0.23 per share, up from net income of $305 million, or $0.18 per share, for the second fiscal quarter of 2005, and down from net income of $441 million, or $0.26 per share, for the third fiscal quarter of 2004.

Applied beat Wall Street’s expectations in some respects, as the company was supposed to earn $0.14 on sales of $1.65 billion in the period. Overall, the financial outlook among analysts is mixed for the chip-equipment giant.

New orders of $1.47 billion for the third fiscal quarter of 2005 decreased 5 percent from $1.55 billion for the second fiscal quarter of 2005, and decreased 40 percent from $2.46 billion for the third fiscal quarter of 2004.

Regional distribution of new orders for the third fiscal quarter of 2005 was: Japan 23 percent, Korea 19 percent, North America 19 percent, Taiwan 15 percent, Europe 12 percent, and Southeast Asia and China 12 percent.

Orders from the silicon foundries remain down. Only 10 percent of the company’s sales were generated by the foundries. Service orders were flat, but flat-panel display sales were strong.

“Industry conditions remain challenging,” said Mike Splinter, president and chief executive of Applied, during a conference call with analysts.

There are positive signs, however. “Foundries are seeing higher loading,” he said. “Demand for flat-panel displays remains healthy.”

By: DocMemory
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