Applied Materials Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Applied Materials Inc. AMAT reported second-quarter fiscal 2025 non-GAAP earnings of $2.39 per share, which beat the Zacks Consensus Estimate by 3.5%. This company reported earnings of $2.09 per share a year ago.AMAT reported revenues of $7.1 billion for the quarter ended April 2025, missing the Zacks Consensus Estimate by 0.28%. This top line increased from the year-ago quarter’s $6.65 billion.AMAT shares have plunged 18.4% in the past year against the Zacks Electronics - Semiconductors industry’s growth of 20.7%.AMAT’s Segments in DetailSemiconductor Systems generated revenues worth $5.26 billion, which contributed 74.1% to its net revenues, reflecting growth of 7.2% from the year-ago quarter. The figure missed the Zacks Consensus Estimate of $5.3 billion.Applied Materials, Inc. Price, Consensus and EPS Surprise Applied Materials, Inc. price-consensus-eps-surprise-chart | Applied Materials, Inc. QuoteApplied Global Services reported revenues of $1.57 billion (22.1% of net revenues), up 2.4% from the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.547 billion. Revenues from Display and Adjacent Markets were $259 million (3.6% of net revenues), up 44.7% from the year-ago quarter. The figure beat the consensus estimate of $250.2 billion.Corporate and Other revenues were $20 million (0.3% of revenues), down 44.4% year over year.Revenues by GeographyRevenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China were $808 million, $252 million, $572 million, $1.56 billion, $1.997 billion, $135 million and $1.774 billion, contributing 11%, 4%, 8%, 22%, 28%, 2% and 25% to net sales, respectively.Revenues in Japan, Korea, and Taiwan increased 26.3%, 58.1% and 96%, respectively, from the year-ago quarter. Revenues in the United States and Southeast Asia decreased 5.3% and 36.6%, respectively. Revenues in Europe and China fell 12.8% and 37.4%, respectively, from the year-ago quarter.Operating ResultsThe non-GAAP gross margin was 49.2%, which expanded 170 basis points (bps) from the year-ago quarter.Operating expenses were $1.31 billion, up 6.3% from the year-ago quarter. As a percentage of sales, the figure contracted 10 bps from the year-earlier quarter to 18.5%.The non-GAAP operating margin of 30.7% expanded 170 bps year over year.Balance Sheet & Cash Flow of AMATAs of April 27, 2025, cash, cash equivalent balances and short-term investments were $6.75 billion, down from $8.02 billion as of Jan. 28, 2025.Inventories were $5.66 billion in the fiscal second quarter compared with $5.5 billion in first-quarter fiscal 2025. Accounts receivables increased to $6.19 billion from $5.9 billion in the previous quarter.The long-term debt was $5.46 billion at the end of the quarter, which remained unchanged from the previous quarter.Applied Materials generated a free cash flow of $1.06 billion, up from $544 million in the prior quarter.AMAT returned $2.00 billion to its shareholders, of which share repurchases were worth $1.67 billion and dividend payments amounted to $325 million.GuidanceFor the fiscal third quarter, Applied Materials expects net sales of $7.2 billion (+/-$500 million). The Zacks Consensus Estimate is pegged at $7.21 billion.Semiconductor Systems, AGS and Display sales are anticipated to be $5.40 billion, $1.55 billion and $250 million, respectively.Applied Materials expects a non-GAAP gross margin of 48.3% and non-GAAP operating expenses of $1.34 billion. It projects a non-GAAP tax rate of 13%.Management expects non-GAAP earnings per share of $2.35 (+/-$0.20). The Zacks Consensus Estimate is pegged at $2.32.Zacks Rank and Stocks to ConsiderCurrently, AMAT carries a Zacks Rank #3 (Hold).Amphenol APH, Juniper Networks JNPR and Upwork UPWK are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. APH, JNPR and UPWK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.APH shares have gained 26.4% for the past year. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.62 per share, up by 4 cents over the past seven days, suggesting a growth of 38.6% from the year-ago quarter’s reported figure.JNPR shares have gained 4.8% in the past year. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings has been revised upward to $2.09 in the past 30 days, suggesting year-over-year growth of 21.5%.UPWK shares have gained 38% over the past year. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amphenol Corporation (APH): Free Stock Analysis Report Juniper Networks, Inc. (JNPR): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report Upwork Inc. (UPWK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks