Applied Materials Sees Strong Momentum

Applied Materials reports revenue and adjusted profit ahead of analyst expectations.
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Applied Materials  (AMAT) - Get Report shares rose in after-hours trading as the semiconductor titan reported revenue and adjusted profit that beat analysts’ expectations.

In the fiscal 2021 first quarter ended Jan. 31, the Santa Clara, Calif., company earned $1.13 billion, or $1.22 a share, up from $892 million, or 96 cents, in the year-earlier period. The analyst consensus derived from a FactSet survey called for $1.27 a share in the latest quarter.

Adjusted net income hit $1.39, beating the analyst consensus of $1.28.

Revenue registered $5.16 billion, up 24% from $4.16 billion a year earlier. The latest figure topped the FactSet analyst consensus of $4.98 billion.

The stock recently traded at $115.01, up 1.4%. It soared 69% over the past six months through Thursday’s close amid strong chip demand during the COVID pandemic.

In Q1 demand in AMAT's semiconductor business continued to speed up, "as major macro and industry trends fuel increasing consumption of silicon across a wide range of markets and applications,” Chief Executive Gary Dickerson said in a statement.

“We have strong momentum across the company, as our broad portfolio and exposure to technology inflections, combined with the traction of our new products, put us in a great position to substantially outgrow our markets again in 2021 and beyond.”

During the pandemic people have been stuck at home for work and play, leading them to increase their use of devices powered by chips.

Morningstar analyst Abhinav Davuluri likes the company. 

Applied Materials "has a wide economic moat based on its intangible assets around equipment design expertise and research and development, cost advantages required to compete for the business of leading-edge manufacturers,” he wrote in November.