APPLIED MATERIALS posts strong outlook after excellent second quarter

  •   01/06/2021 - 11h45
  •   DEHOUI Lionel

US-based Applied Materials has delivered a record performance in the second quarter of 2021. It reported better-than-expected results for the period as a whole. Indeed, the company benefited from the strong demand caused by the semiconductor shortage that has been rocking the business world for several months. In addition, the company posted a solid outlook for the new quarter.

APPLIED MATERIALS posts strong outlook after excellent second quarter

Second Quarter Performance

Semiconductor equipment maker Applied Materials saw its revenue jump in the second quarter of its fiscal year 2020/21 (ended early May). It actually grew 41% to a record $5.58 million. Also, this turnover is slightly higher than the market's expectations of $5.41 billion.

In Q2-2021, the group's net profit grew 76% to $1.33 billion (or $1.43 per share). Adjusted net income climbed 85% to $1.51 billion in the quarter. This leads to an EPS of $1.63.

It also beat the market consensus of $1.51. Also, the Santa Clara, California-based group saw its adjusted operating margin improve by 7 basis points for the full second quarter of 2021. It stands at 31.7%.


Semiconductor business drives results

Applied Materials' better results for the second quarter of 2021 are driven by the overall strength of its semiconductor business. Indeed, during this period, the U.S. group says it benefited from strong demand due to the chip shortage.

As a reminder, several industries have been facing a shortage of semiconductors for the past few months. This has forced many of them to slow down their production. This situation was on the other hand, beneficial for Applied Materials which saw the demand increase during the last quarter.

At the same time, the company is confident in its ability to outperform its markets. The broad trends suggest that demand for semiconductors is set to continue for a long time. However, the company believes that its leadership in materials engineering is more critical in delivering new chip technologies.


Third Quarter Outlook

Applied Materials released its guidance for the new quarter. Building on its strong performance in Q2-2021, the company hopes to continue its growth momentum in the third quarter of the current financial year. Over that period, it expects adjusted earnings per share of between $1.70 and $1.82. For its part, Wall Street is expecting $1.56.

Also, the semiconductor equipment maker expects to achieve average revenue of $5.92 billion in the current quarter while Wall Street expects $5.56 billion. As for the wafer equipment market, the company expects it to be at a higher level.