Applied Materials Up; Outlook Really Up

SANTA CLARA, Calif. (TheStreet) -- Investors bid up shares of Applied Materials(AMAT Quote) Wednesday on better-than-expected quarterly results and some sanguine remarks by the company's boss during a conference call.

Applied Materials stock was changing hands midday Wednesday at $13.87, up 65 cents, or nearly 5%. Volume reached 17 million shares; daily turnover of the stock averages 20 million.

After the closing bell Tuesday, the big maker of semiconductor-fabricating equipment said it broke even in its fiscal third quarter (excluding items), far better than the 8-cent loss that Wall Street was expecting. The company attributed the results to that recession-era catch-all: aggressive cost cutting.

Year-over-year comparisons remain difficult, however: the company's loss of $55 million, or 4 cents a share, which includes items, is down from a profit of $228 million, or 17 cents a share, a year ago. Revenue fell 39% to $1.13 billion.

But business is evidently looking up in the notoriously boom-bust microchip sector. Applied Material's chief executive, Mike Splinter, told analysts and investors in the company's quarterly conference call that demand was increasing "for the first time in a long time" and that the economic slowdown in three big markets, the U.S., Japan and Europe, "appears to be moderating."

As it happens, there was some numerical proof for those statements: The company said it inked new orders during the third quarter worth $1.07 billion, up from about $650 million in its second quarter. Some 25% of that fresh business came out of China and Southeast Asia, Applied said.