Applied Materials Delivers Strong 2Q 2012 Results

Applied Materials, Inc. reported results for its second quarter of fiscal 2012 ended April 29, 2012.

Applied generated orders of $2.77 billion and net sales of $2.54 billion. Non-GAAP operating income was $490 million, and non-GAAP net income was $349 million or 27 cents per share. GAAP operating income was $409 million, and GAAP net income was $289 million or 22 cents per share.

“Our strong performance in the quarter was driven by growing global demand for mobile products such as smartphones and tablets,” said Mike Splinter, chairman and CEO. “Applied’s semiconductor products are enabling the next generation of more powerful and feature-rich devices.”

“Applied delivered profitability at the high end of our expectations and increased operating cash flow to 24 percent of net sales,” said George Davis, chief financial officer. “During the quarter, we announced a 13% dividend increase, established a new three-year $3 billion share repurchase program, and used $200 million to repurchase over 16 million shares of our common stock.”

During the quarter, Varian generated orders of $366 million and net sales of $333 million, which were reported within the Silicon Systems Group (SSG) and Applied Global Services (AGS) segments. In the prior quarter, Varian generated orders of $267 million and net sales of $202 million.

Silicon Systems Group orders were $1.97 billion, up 39 percent led by increased demand from foundry customers. Net sales were $1.78 billion, up 32%.

Applied Global Services orders were $650 million, up 26%, reflecting a thin film solar equipment order along with higher demand for semiconductor spares and services. Net sales increased slightly to $551 million.

Display orders were $84 million, up $44 million from low levels. Net sales were $134 million, up 29%. Energy and Environmental Solutions (EES) orders increased to $62 million, and net sales were $79 million, down 62%, reflecting excess manufacturing capacity in the solar industry.

For the third quarter of fiscal 2012, Applied expects net sales to be flat to down 10% sequentially. For the full year, Applied is updating its previous outlook for net sales and non-GAAP EPS, provided on March 28, 2012. The company now expects net sales to be at the high end of the range of $9.1 billion to $9.5 billion, and non-GAAP EPS to be at the high end of the range of $0.85 to $0.95.