What Applied Materials’ Q2 earnings mean for chip industry

Applied Materials (AMAT) posted second quarter earnings per share of $2.09, coming in $0.10 above estimates, as well as revenue of $6.65 billion, topping the estimated $6.52 billion.

Yahoo Finance Hosts Josh Lipton and Julie Hyman and Futurum Chief Market Strategist Cory Johnson discuss the company’s earnings and what they mean for the artificial intelligence race.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl

Video Transcript

Earnings out right now from applied materials.

That company reporting earnings per share of $2.09.

That’s 10 cents above estimates as ne second quarter net sales at 6.65 billion.

6.52 billion is what was estimated here in the company given a range for third quarter net sales of 6.25 to $7.05 billion.

Analysts have been looking for $6.59 billion so looks like the shares are not doing a heck of a lot at the moment.

Um And in terms of year to date, they are up about 33% here, Josh.

Yeah, it’s had a tremendous run.

I mean, it’s about 30% this year.

It’s up around 80% over the past 12 months.

So it was real strong heading into the print.

And obviously, you know, you care about this name because they’re a big, big maker of chip making equipment.

So they supply names like TS MC Intel, Samsung, I mean, you, you really name and investors.

Obviously, they like to hear good things from a ma because they, they will take it out as sort of an indication of better times ahead of the chip industry.

And obviously when you talk a ma, you talk China because a MA is restricted in in what it can ship to China.

You know, China would like to be a big global tech powerhouse.

The Biden administration has other plans.

Yes, indeed, it does.

Um And a lot of the company sales come from outside of the US, um applied materials just coming out as we talked about and reporting those better than expected results on the top and bottom line.

But the share is not doing much at the moment.

Joining us now is Corey Johnson for futur um chief Market strategist.

And he’s not just exactly and he’s not just joining us.

He’s joining us here in York City.

Very excited to have you been in studios with you guys before?

Yes, but in, in New York City, same city, different studio.

Yes, it is.

Exactly.

So let’s talk about a ma shall we um with that company coming out?

And, and the market reaction is kind of ma, well, I mean, the guidance is you could drive a truck through that guidance.

I don’t know how that’s guidance.

I mean, really like saying it’s gonna be somewhere near something up or down, you know, the numbers they put up here today just now are good.

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Uh the bottom line much better than expected, but that’s what these guys do.

They always, you know, lower their expectations about what they’re gonna do and then beat it.

Um, uh, I’m, I’m gonna dig through the release a little bit more.

Um, but what’s, what’s really interesting is that they’ve got lots of different pieces of their business and that their foundry services business has actually been doing quite well.

Um, uh, well, some of the other businesses have not and so, um, you know, these numbers are just about flat from where they were a year ago.

And we, we talk so much about expectations when we look at the market but companies that get bigger are better than companies that get smaller.

Cisco is a case in point yesterday, Cisco trading up after the close when they put up a print that was 13% up lower than it had in the previous year.

The networking segment was down 27% for a company that sells networking equipment.

So the, the market was briefly fooled by that, but a shrinking company, not a good thing, growing company.

Good thing.

And I think the thing we’re gonna hear from a mat on the call is, is a real understanding of what’s hap is, has, is the turnaround happening in semiconductors across uh the world.

We’ve gotten really mixed results from different semi companies over the course of the last few weeks.