Applied’s first quarter orders crash by a third
If Applied Materials stumbles, then the rest of the industry is likely to do so also. On the surface, then, the company’s first quarter results make for gloomy reading for the industry.
The Californian-based company has reported a 19% sequential fall in sales to US$1.78 billion. Net income also dropped sequentially, ending 19% down on the previous quarter at US$289 million. Perhaps most worrying, new orders declined by a staggering 36% sequentially to US$1.68 billion.
When compared with the same period last year, however, the results were not so disastrous. Net sales were actually up year on year by 14%, while net income leapt by 251% on the same period last year. Even new orders only fell by less than one per cent year on year.
It is important to put these figures into context. 2004 was a very strong year for the semiconductor equipment market, as chip makers invested heavily (some would say, over-heavily) in tools.
Applied indeed boosted sales by 79% over the year. 2005 is never going to be such a strong growth year, neither for the market as a whole nor for Applied itself.
Given this, the first quarter results could have been a lot worse. This appears to be the sentiment of Applied’s chief executive officer Mike Splinter.
Commenting on the first quarter results, he said: "Given the challenging semiconductor environment this past quarter, we are pleased with the company’s financial performance.
"As the number of applications for chips continues to increase, we are confident in the long-term expansion of the semiconductor industry, and we continue to invest in the technologies and services that we believe position the company to benefit from this growth."
