News Article
Applied Materials reports profit fall
The company also plans to reduce its workforce by cutting 1800 jobs by the end of fiscal 2009.
Fourth quarter net sales were $2.04 billion, down from $2.37 billion for the fourth quarter of fiscal 2007, and up from $1.85 billion for the third quarter of fiscal 2008. Gross margin was 39.1 percent, down from 45.5 percent for the fourth quarter of fiscal 2007, and down from 40.2 percent for the third quarter of fiscal 2008. GAAP net income was $231 million, or $0.17 per diluted share, down from net income of $422 million, or $0.30 per diluted share, for the fourth quarter of fiscal 2007, and up from $165 million, or $0.12 per diluted share, for the third quarter of fiscal 2008.
New orders of $2.21 billion for the fourth quarter of fiscal 2008 were comparable to the fourth quarter of fiscal 2007, and increased from $2.03 billion for the third quarter of fiscal 2008. Regional distribution of new orders for the fourth quarter of fiscal 2008 was: Taiwan 26 percent, North America 22 percent, South-east Asia and China 22 percent, Europe 11 percent, Korea 10 percent, and Japan 9 percent. Backlog at the end of the fourth quarter of fiscal 2008 was $4.85 billion, up from $4.74 billion at the end of the third quarter of fiscal 2008 and up from $3.65 billion at the end of fiscal 2007.
Fiscal 2008 net sales were $8.13 billion, down from $9.73 billion for fiscal 2007. Gross margin for fiscal 2008 was 42.4 percent, down from 46.1 percent for fiscal 2007. GAAP net income for fiscal 2008 was $961 million, or $0.70 per diluted share, down from net income of $1.71 billion, or $1.20 per diluted share, for fiscal 2007. New orders of $9.16 billion for fiscal 2008 decreased from $9.68 billion for fiscal 2007.
“Fiscal 2008 was a pivotal year for Applied as we made significant progress in advancing our Silicon and Display businesses and expanding in the solar market. Our fourth quarter results demonstrate effective performance in a very challenging environment,” said Mike Splinter, president and CEO. “We passed a major milestone as the first SunFab Thin Film Solar Line began volume production demonstrating Applied’s commitment to deliver exciting new technology to the solar industry.
“As Applied moves into fiscal 2009, we will implement further cost reduction actions due to declining market conditions, and we will invest in strategic priorities,” concluded Splinter.
Applied will implement a restructuring programme beginning in the first quarter of fiscal 2009, designed to streamline the organisation and reduce operating costs. When completed the programme is expected to drive annualised cost savings of approximately $400 million. As part of this programme, the company plans to reduce its global workforce by approximately 12% or 1,800 positions by the end of fiscal 2009 through a combination of attrition, voluntary separation and other workforce reduction programmes consistent with local legal requirements and in consultation with employee representatives, where applicable.
Non GAAP net income for fiscal 2008 was $1.20 billion, or $0.87 per diluted share, compared to non GAAP net income of $1.90 billion, or $1.33 per diluted share, for fiscal 2007. Non GAAP net income for the fourth quarter of fiscal 2008 was $264 million, or $0.20 per diluted share, compared to non GAAP net income of $472 million, or $0.34 per diluted share, for the fourth quarter of fiscal 2007, and $228 million or $0.17 per diluted share for the third quarter of fiscal 2008.
Effective in the first quarter of fiscal 2008, Applied changed its management reporting system for services, with all service results reported in the Applied Global Services segment. Fiscal 2007 segment information has been reclassified to conform to the fiscal 2008 presentation.
New orders of $2.21 billion for the fourth quarter of fiscal 2008 were comparable to the fourth quarter of fiscal 2007, and increased from $2.03 billion for the third quarter of fiscal 2008. Regional distribution of new orders for the fourth quarter of fiscal 2008 was: Taiwan 26 percent, North America 22 percent, South-east Asia and China 22 percent, Europe 11 percent, Korea 10 percent, and Japan 9 percent. Backlog at the end of the fourth quarter of fiscal 2008 was $4.85 billion, up from $4.74 billion at the end of the third quarter of fiscal 2008 and up from $3.65 billion at the end of fiscal 2007.
Fiscal 2008 net sales were $8.13 billion, down from $9.73 billion for fiscal 2007. Gross margin for fiscal 2008 was 42.4 percent, down from 46.1 percent for fiscal 2007. GAAP net income for fiscal 2008 was $961 million, or $0.70 per diluted share, down from net income of $1.71 billion, or $1.20 per diluted share, for fiscal 2007. New orders of $9.16 billion for fiscal 2008 decreased from $9.68 billion for fiscal 2007.
“Fiscal 2008 was a pivotal year for Applied as we made significant progress in advancing our Silicon and Display businesses and expanding in the solar market. Our fourth quarter results demonstrate effective performance in a very challenging environment,” said Mike Splinter, president and CEO. “We passed a major milestone as the first SunFab Thin Film Solar Line began volume production demonstrating Applied’s commitment to deliver exciting new technology to the solar industry.
“As Applied moves into fiscal 2009, we will implement further cost reduction actions due to declining market conditions, and we will invest in strategic priorities,” concluded Splinter.
Applied will implement a restructuring programme beginning in the first quarter of fiscal 2009, designed to streamline the organisation and reduce operating costs. When completed the programme is expected to drive annualised cost savings of approximately $400 million. As part of this programme, the company plans to reduce its global workforce by approximately 12% or 1,800 positions by the end of fiscal 2009 through a combination of attrition, voluntary separation and other workforce reduction programmes consistent with local legal requirements and in consultation with employee representatives, where applicable.
Non GAAP net income for fiscal 2008 was $1.20 billion, or $0.87 per diluted share, compared to non GAAP net income of $1.90 billion, or $1.33 per diluted share, for fiscal 2007. Non GAAP net income for the fourth quarter of fiscal 2008 was $264 million, or $0.20 per diluted share, compared to non GAAP net income of $472 million, or $0.34 per diluted share, for the fourth quarter of fiscal 2007, and $228 million or $0.17 per diluted share for the third quarter of fiscal 2008.
Effective in the first quarter of fiscal 2008, Applied changed its management reporting system for services, with all service results reported in the Applied Global Services segment. Fiscal 2007 segment information has been reclassified to conform to the fiscal 2008 presentation.
