SANTA CLARA (dpa-AFX) - Applied Materials, Inc. (AMAT), the world's biggest semiconductor equipment maker, said Wednesday after the markets closed that its fourth quarter profit fell 2.6% from last year, as sales dropped amid weakness in its silicon, solar and electronic display businesses. However, the company's quarterly earnings per share came in above analysts' expectations. At the same time, the company forecast first quarter earnings below analysts' current consensus estimate and also gave a weak sales outlook for the quarter.
The Santa Clara, California-based company reported GAAP net income for the fourth quarter of $456 million or $0.34 per share, compared to $468 million or $0.35 per share for the year-ago quarter.
The latest quarter results include a $0.13 per share tax benefit.
Excluding items, non-GAAP net income for the fourth quarter was $271 million or $0.21 per share, compared to $476 million or $0.36 per share in the prior year quarter.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $0.19 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Gross margin for the fourth quarter narrowed to 39.0% from 42.5% a year ago, hurt mainly by the overall decline in net sales.
Net sales for the fourth quarter fell 24% to $2.18 billion from $2.89 billion in the same quarter last year. Fourth quarter net sales declined 22% sequentially. Seventeen analysts had a consensus revenue estimate of $2.15 billion for the fourth quarter.
Fourth quarter sales from the company's silicon business fell to $1.07 billion from $1.48 billion a year earlier, while sales from display business slipped to $171 million from $281 million last year.
Fourth quarter sales from the company's services business rose to $629 million from $516 million a year ago, while sales from its energy and environmental solutions business dropped to $315 million from $606 million last year.
New orders for the fourth quarter totaled $1.60 billion, down 47% from $3.03 billion in the year-ago quarter. The decline in orders is due to lower demand for TV and mobile device display equipments, weaker demand in flash and DRAM as well as pressure in Energy and Environmental Solutions segment.
Europe contributed 11% of the new orders for the fourth quarter, while North America contributed 20%, Southeast Asia 6%, China 13%, Taiwan 18%, Japan 11% and Korea contributed 21%. Backlog fell by $851 million to $2.39 billion at the end of the quarter.
During the fourth quarter, the company repurchased 16 million shares of its common stock for $276 million, and ended the quarter with cash, cash equivalents and investments of $7.17 billion, compared to $6.81 billion a t the end of the previous quarter.
After the end of the quarter, Applied Materials completed the acquisition of Varian Semiconductor Equipment Associates, Inc. for about $4.2 billion net of cash acquired.
Looking forward, the company said it expects first quarter net sales to be down in the range of 5% to 15% quarter over quarter, implying revenue of $1.85 billion to $2.07 billion. The company also forecast first quarter non-GAAP earnings to be in the range of $0.08 to $0.16 per share.
Analysts currently expect the company to earn $0.18 per share on revenue of $2.06 billion for the first quarter.
Mike Splinter, Applied's chairman and chief executive officer, said, 'While we expect the first half of fiscal 2012 to be impacted by the challenging economic environment, we anticipate that our overall business will strengthen during the second half of the year.'
Among other semiconductor equipment makers, KLA-Tencor Corp. (KLAC) last month reported first quarter profit that rose 25% from last year, as revenue increased 17% despite what the company called a challenging global economic and industry environment. The company's quarterly earnings per share came in line with analysts' expectations.
Also last moth, Lam Research Corp. (LRCX) reported a 63% drop in first quarter profit due to lower revenues and higher expenses.
Another semiconductor equipment maker Novellus Systems Inc. (NVLS) also last month reported lower profit and revenue for its third-quarter.
Applied Materials shares, which have traded in a range of $9.70 to $16.93 over the past year, closed Wednesday's regular trading session at $12.47, down 17 cents or 1.34%. The stock is currently losing 40 cents or 3.21% in after hours trading.
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