SANTA CLARA, Calif.--Applied Materials Inc. today reported a 21% sequential drop in net sales to $1.0 billion in the company's fiscal first quarter, ended Jan. 27, compared to $1.26 billion in the prior three-month period. Applied's sales were 58% below $2.36 billion in the same quarter last year.
Including charges for layoffs and restructuring in the quarter, Applied posted a net loss of $45 million compared to a net income of $157 million in the same quarter last year. A one-time pre-tax charge of $77 million was taken to cover severance in connection with the elimination of 1,700 jobs announced late last year (see Dec. 12 story). An $8 million charge was also taken for acquired in-process R&D.
The world's largest supplier of semiconductor equipment managed to beat Wall Street's consensus with an ongoing net income--excluding charges--of $15 million, or $0.02 per share. Analysts had been estimating a loss of $0.01 per share, according to First Call/Thomson Financial.
Applied said new orders totaled $1.12 billion in the fiscal first quarter, a slight increase over $1.10 billion reported in the prior fiscal quarter. Orders were 54% below $2.43 billion in the fiscal first quarter of 2001.
"While we believe that industry conditions remain challenging in the short-term, we are somewhat encouraged by orders for the new technologies," said James C. Morgan, chairman and CEO at Applied.
During a conference call with financial analysts, Applied executives projected a 10-to-15% sequential increase in orders during the current fiscal quarter, which ends in April. However, Morgan said it will take another quarter or two before it is clear that a sustained recovery is underway in end-markets for semiconductors. Applied is projecting a 25% decline in worldwide semiconductor capital spending this year compared to 2001, but the company believe conditions are improving, he said.
About $10 billion will be spend on 300-mm wafer fab equipment in 2002, according to Joseph R. Bronson, executive vice president and chief financial officer at Applied. He said about $6 billion was spend on 300-mm systems in 2001.
Applied is currently projecting sequentially flat revenues in the current quarter at $1.0 billion or slightly higher, said the CFO. If $1.0 billion in net sales is achieved in the fiscal second current fiscal quarter, Applied expects to be profitable in the period, Bronson told analysts.
