Applied Materials Inc. posted a higher quarterly profit Tuesday as the world's top supplier of equipment for making microchips saw revenue jump by one-fifth amid growing demand for consumer electronics.
The Santa Clara, California-based company also said it expected to show a higher profit in its current quarter, with earnings of 28 to 30 cents per share, ahead of the Wall Street average forecast of 27 cents per share on Reuters Estimates.
The net profit for its second quarter ended April 30 was $413 million, or 26 cents per share, compared with $305 million, or 18 cents per share, a year earlier.
Excluding special items such as stock-based compensation, the company earned $453.3 million, or 29 cents per share, compared with $304.8 million, or 18 cents per share a year earlier.
The company had been expected to earn 23 cents per share, including 2 cents of stock-based compensation, according to the average forecast on Reuters Estimates.
Chief Executive Mike Splinter said Applied was benefiting from booming sales of electronics, a $1.3 trillion-a-year market that was expected to grow 7 percent in 2006.
"That's amazing growth on a base that big and represents fast-growing demand for cellphones, PCs" and other devices, Splinter told a conference call. "In general we see a healthy environment where the growth rate in electronic products is increasing."
Applied's revenue was $2.25 billion, up 21 percent from the $1.86 billion a year earlier and ahead of the $2.14 billion expected by analysts.
Applied had new orders of $2.49 billion in the quarter, up 22 percent from the prior quarter and 60 percent higher than a year earlier.
"Customers have spent rationally on expansion, and are maintaining high rates of utilization. The industry is healthier than it has been in years," Splinter said.
Chief Financial Officer Nancy Handel said she expected Applied's quarterly revenue to rise 5 to 10 percent from the second quarter, while new orders would also rise 5 to 10 percent.
Wall Street analysts had been expecting Applied to show a third quarter net profit, including items, of 27 cents per share, on revenue of $2.35 billion, according to Reuters Estimates.
Applied's stock has risen about 10 percent over the past year. The company trades at nearly 19 times expected 2006 profit, compared to almost 20 times for Novellus Systems Inc and more than 25 times for KLA-Tencor its chief competitors.
