Applied Materials (AMAT), a supplier of semiconductor manufacturing equipment to chipmakers around the world, posted strong top and bottom line results, beating consensus estimates. The company reported record quarterly revenue for the quarter of $4.57 billion, a 29% increase year-over-year. The company has been investing in high growth markets with greater margins, in turn improving operational efficiency.
Profit for the quarter came in at $1.12 billion, increasing 37% from the year-earlier quarter, while reported EPS jumped 43% to $1.09. Meanwhile, earnings on an adjusted basis grew 54% to $1.22 per share. Rise in the bottom line results was driven by double-digit growth across the company’s segments and geographies, especially Japan, Korea and China.
“Applied’s performance in the second fiscal quarter was another all-time record for the company, which demonstrates strong execution and customer pull for materials solutions that help accelerate roadmaps and bring new devices to market faster,” said Gary Dickerson, President and CEO.
Applied’s high growth market China and Korea continued its growth momentum in the second quarter, with revenue increasing 56% and 32% year-over-year. China and Korea regions were the highest revenue contributors, accounting for 27% and 25% of total sales respectively. Japan and Europe also posted double-digit increases in revenue, offset by dismal sales performance in Taiwan and United States.
While Applied Materials’ all three segments performed better than expected, Display and Adjacent Market segment posted standout performance increasing 53% year-over-year. Higher capital spending in this space helped the company gain greater sales, as more consumers transitioned to smartphones.
For 3Q18, Applied Materials expects sales in the range of $4.33 billion to $4.53 billion. Adjusted EPS is expected to be $1.13 to $1.21.
The company’s stock plunged over 5% post the earnings release. However, the stock has gained over 15% over the past one year.