Applied Materials Says Orders Could Drop in Next Quarter

Applied Materials Inc., the dominant maker of microchip production equipment, reported a quarterly profit that topped expectations, but warned that orders could drop as much as 15% in the next quarter.

In the company’s fiscal third quarter that ended July 28, Santa Clara, Calif.-based Applied Materials said it earned $115.2 million, or 7 cents a share, topping the Wall Street average expectation of 5 cents a share.

The results were virtually flat compared with a year-ago profit of $114.9 million, or 7 cents a share.

For the fourth quarter, Applied Materials said orders, a measure of what customers request but have not yet received, were expected to fall 5% to 15% from the third quarter.

Revenue, the company said, will be flat or modestly higher than the third quarter, and earnings per share will improve.

Third-quarter orders rose 5% to $1.78 billion from $1.69 billion in the second quarter.

Orders were below the company’s guidance given at the end of its last quarter but still were above analyst expectations that were diminished by recent industry news.

Net sales were up 26% to $1.46 billion from the second quarter, but down from the year-ago figure of $1.58 billion.

Analysts were expecting a third-quarter profit in the range of 4 cents to 7 cents a share, with an average estimate of 5 cents, according to a poll of 27 analysts by market tracker Thomson First Call.

Analysts were expecting revenue in the range of $1.21 billion to $1.4 billion, with an average expectation of $1.29 billion, according to First Call.

Shares of Applied Materials fell 3.8% to $12.95 in after-hours trading after ending regular trading on Nasdaq at $13.46.