:max_bytes(150000):strip_icc()/GettyImages-1667258646-37b51f8d0d16456d838b5e26afc03d80.jpg "What You Need To Know Ahead of Applied Materials’ Earnings")
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Key Takeaways
- Applied Materials reports fiscal third-quarter earnings on Thursday, Aug. 15.
- Analysts expect the semiconductor equipment maker to post year-over-year growth in revenue and earnings.
- Investors will likely be watching for updates on the company’s China sales and the impact of customer Intel’s plans to cut costs.
Applied Materials (AMAT) is set to report fiscal third-quarter earnings after the bell on Aug. 15, with investors likely watching for updates on the company’s China sales and the impact of customer Intel’s (INTC) plans to cut costs.
Analysts expect revenue to grow to $6.69 billion, up from $6.43 billion a year ago, according to estimates compiled by Visible Alpha. Net income is projected to come in at $1.67 billion or $2 per share, also representing growth from the year-ago period, but a sequential decline.
| Analyst Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
| Revenue | $6.69 billion | $6.65 billion | $6.43 billion |
| Diluted Earnings Per Share | $2 | $2.06 | $1.85 |
| Net Income | $1.67 billion | $1.72 billion | $1.56 billion |
Key Metrics: China Sales
Applied Materials will report how much of its sales came from the China market, which could provide investors greater insight into how geopolitical tensions and potentially tighter curbs on exports to China could affect the company.
Analysts anticipate revenue for the China region will be $2.36 billion, or 35.3% of the company’s expected total revenue. UBS analysts said China sales as a share of total revenue could fall to normalize at 30% by the end of the calendar year, down from 43% in the fiscal second quarter.
The analysts said they don’t see demand falling off in the second half of the year and they expect guidance to show an upside as Chinese companies procure equipment in the near term ahead of a potentially tighter curbs on exports to the country. Consensus estimates project fourth-quarter revenue guidance to come in at $6.91 billion.
Citi analysts said that they expect Applied Materials stock to “remain volatile through the US elections,” given uncertainty around possibly tougher restrictions.
Business Spotlight: Cost Cuts by Intel, an Applied Materials Customer
Applied Materials could also provide investors with more details about how planned cost cuts by Intel, one of its customers, might affect the company.
Citi analysts lowered their estimates for Applied Materials, citing Intel’s lowered capital expenses (CapEx) outlook among other reasons, after Intel recently reported wider-than-expected losses and announced layoffs to trim spending.
Applied Materials have gained about 18% since the start of the year, at $191.67 as of 2:20 p.m. ET Friday.