Applied Materials profit beats on memory chip demand
(Reuters) - Chip-equipment maker Applied Materials Inc reported a better-than-expected third-quarter profit as contract manufacturers spend more on technology used to make smartphone and memory chips.
The company also forecast current-quarter adjusted profit largely above analysts' average estimate.
Demand for DRAM chips, used mainly in personal computers, is expected to grow in the current quarter, Chief Executive Gary Dickerson said on call with analysts.
Applied Materials, which also provides equipment to make flat panel displays and solar cells, forecast an adjusted profit of 25-29 cents per share for the fourth quarter.
Analysts on average were expecting a profit of 26 cents per share, according to Thomson Reuters I/B/E/S.
The company said it expects revenue growth of about 10 to 17 percent, implying revenue of $2.19 billion to $2.33 billion for the quarter. Analysts on average were expecting $2.28 billion.
Leading contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd and its rivals are working on new cutting-edge manufacturing technology that will allow them to make more advanced chips for mobile gadgets.
TSMC, which reported results in July, said it expected revenue to grow at least a record 20 percent this year, helped by increased demand from smartphone makers such as Apple Inc.
Applied Materials' net income rose to $301 million, or 24 cents per share, in the third quarter ended July 27, from $168 million, or 14 cents per share, a year earlier.
On an adjusted basis, the company earned 28 cents per share.
Revenue rose 14.7 percent to $2.27 billion.
Analysts had expected a profit of 27 cents per share on revenue of $2.29 billion.
Revenue in the company's silicon systems business, which brings in about two-thirds of total sales, rose 16 percent to $1.48 billion.
Backlog grew 9 percent from the second quarter to $2.97 billion, which includes positive adjustments of $19 million.
Applied Materials shares closed at $21.15 on the Nasdaq on Thursday. They were up 1.2 percent in extended trading.
(Reporting By Lehar Maan in Bangalore; Editing by Maju Samuel)