(Adds details from analyst call, comment; updates stock move)
By Noel Randewich
SAN FRANCISCO May 15 Top chip gear-maker
Applied Materials on Thursday posted higher fiscal
second-quarter revenue as investments to make more smartphones
and memory chips helped offset a slow personal computer market.
Shares of the company rose after its report reassured
investors who were cautious following recent disappointing
quarterly forecasts from other companies.
"We've had a lot of mixed commentary through earnings season
and some pretty concerning outlooks," said Pacific Crest analyst
Weston Twigg. "That's particularly true for (semiconductor
capital) names where there's been concern about demand dropping
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.
But due to the complexity of the new technology, the timing
of each company's investments and eventual launch of new
production lines has remained unclear to investors.
On a conference call with analysts on Thursday, Chief
Executive Officer Gary Dickerson said he expects contract chip
manufacturers to increase their investments by up to 20 percent
this year, driven by smartphones and other connected mobile
While a slow PC market is muting demand for Intel Corp's
processors, the growth of mobile devices is driving
more investment in NAND and DRAM memory chips.
Applied Materials agreed in September to buy No. 3 chip
equipment maker Tokyo Electron Ltd in an all-stock deal
worth more than $10 billion as the number of major customers
making advanced chips declines. Dickerson said he continues to
expect regulatory approval in the second half of 2014.
Applied Materials said its revenue for the quarter ended in
April was $2.35 billion, up from $1.97 billion in the year-ago
period. Analysts expected second-quarter revenue of $2.349
billion, according to Thomson Reuters I/B/E/S.
The company had a net profit for the quarter of $262
million, or 21 cents a share, compared with a net loss of $129
million, or 11 cents, in the same quarter last year.
Excluding items, the company earned 28 cents per share, in
line with expectations.
The company said it expected revenue in the current quarter
to be flat or down 5 percent from the previous quarter, implying
revenue of $2.23 billion to $2.35 billion. Analysts on average
expected $2.318 billion.
Shares of Applied Materials rose 3.26 percent after closing
down 1.37 percent at $18.69 on Nasdaq.
(Reporting by Noel Randewich; Editing by Marguerita Choy and