Why Applied Materials (AMAT) Spiked on Thursday

NEW YORK (TheStreet) -- Applied Materials (AMAT) spiked after first-quarter earnings beat expectations and as the chipmaker predicted robust sales growth in the three months to April.

By market close, shares had added 5.5% to $18.89. Trading volume of 28.8 million was more than double its three-month daily average of 11.5 million.

In the current quarter ending April, the semiconductor-equipment maker expects sales to increase 3% to 10% sequentially, suggesting revenue in the range of $2.25 billion to $2.4 billion. Per-share earnings are expected between 25 cents and 29 cents.

Analysts surveyed by Thomson Reuters anticipate second-quarter revenue of $2.35 billion and earnings of 28 cents a share.

In its first quarter, the Santa Clara, Calif.-based business recorded net income of 23 cents a share, a penny higher than consensus. Revenue of $2.19 billion came in 39.5% higher than the year-ago quarter and exceeded expectations by around $57 million.

TheStreet Ratings team rates APPLIED MATERIALS INC as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate APPLIED MATERIALS INC (AMAT) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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