Applied Materials Q3 Earnings Beat Estimates, Revenue Tops Consensus

Key Takeaways

• Adjusted earnings per share (EPS) of $2.05, beating estimates of $1.99.
• Revenue of $6.78 billion, surpassing the consensus estimate of $6.67 billion.
• Record revenue, earnings, and cash flow for fiscal 2023.

Strong Demand for DRAM and 3D NAND

Applied Materials' revenue growth in the quarter was driven by strong demand for DRAM memory chips and 3D NAND technology.

Forecast for Current Quarter

For the current quarter, Applied Materials forecasts adjusted EPS of $1.84 on sales of $6.4 billion.

Bullish Outlook for Semiconductor Industry

Applied Materials' results are seen as an indicator of the health of the semiconductor industry, which is expected to continue growing in the coming years.

Analyst Commentary

Analysts polled by FactSet had expected earnings of $1.99 per share on sales of $6.54 billion.

Extended Trading Reaction

Applied Materials' stock price dropped over 7% in extended trading on Thursday following a report of a criminal investigation.

Q3 Earnings Breakdown

Revenue

• Revenue of $6.78 billion, up from $6.72 billion in the year-earlier period.
• Analysts had expected $6.54 billion in revenue.

Earnings

• Adjusted EPS of $2.05, up from $1.85 in the prior year quarter.
• Analysts had estimated $1.99 in earnings per share.

Outperforming the Market

Applied Materials continues to outpace the wafer fabrication equipment market, with growth in the quarter.

Previous Quarter Performance

In the fiscal first quarter, Applied Materials beat Wall Street targets and reported a strong current-quarter forecast.

Conclusion

Applied Materials' strong Q3 earnings and solid forecast indicate a positive outlook for the company and the semiconductor industry as a whole.