What To Expect When Applied Materials Publishes Q2 Results

by Trefis Team
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The world’s largest semiconductor capital equipment supplier, Applied Materials (NASDAQ:AMAT), is expected to publish its Q2 2019 results on Thursday, May 16, reporting on a quarter that likely saw semiconductor capital expenditures decline, amid falling demand and pricing across the industry. Below, we take a look at some of the key trends to watch as the company reports earnings.

We have created an interactive dashboard analysis on What To Expect When Applied Materials Publishes Q2 FY’18 Results? You can modify the key drivers to arrive at your own estimates for the company’s revenues and EPS.

What to expect from Applied Materials in Q2?

  • Revenues are expected to decline by about 24% YoY to about $3.5 billion, on account of weaker capital spending by semiconductor players.
  • EPS is projected to come in at about $0.66 per share, marking a decline of about 45% YoY.

How will the Semiconductor Systems segment perform?

  • Semiconductor systems segment provides capital equipment used to fabricate semiconductor chips. The segment accounted for ~63% of Applied’s 2018 revenues.
  • We expect revenues to decline by close to 30% YoY and 7% QoQ, driven by weaker spending by memory manufacturers and chip vendors, who have seen pricing and demand cool.
  • For instance, DRAM prices fell by 30% in Q1, per DRAMeXchange.

How will the display segment fare?

  • This segment sells products for manufacturing liquid crystal, OLED, and other displays products. The segment accounted for about 15% of revenues in FY’18.
  • We expect segment revenues to fall by about 35% YoY, driven by weaker demand for consumer electronics products and also due to the current trade tensions between the U.S. and China.
  • There has also been some weakness in the TV space, with delays in some major TV factory projects pushing equipment demand into 2020.

 

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