Stock Market Update - Thu Nov 15 08:28:57 EST 2007

Shares of Applied Materials (AMAT 18.81) traded lower on Thursday, after the semiconductor equipment maker reported a lower fourth quarter profit and offered a disappointing outlook for the current period due to a more challenging operating environment and concerns about the economy.  The stock, which has already lost more than 18% since reaching a high in August, was indicated roughly 6% lower in pre-market activity. 

For its fiscal fourth quarter, Applied Materials posted net income of $421.8 million, or $0.30 per share, compared with $449 million, or $0.30 per share, a year earlier.  Excluding non-recurring items, earnings were $0.32 per share - three-cents better than analysts' expectations.  Revenue fell 6% year-over-year to $2.37 billion, just short of the consensus estimate of $2.38 billion. 

New orders for the period plunged 18% from a year ago, and 3% sequentially, to $2.21 billion amid a industry downturn and growing concerns about sales during the holiday season.  Gross margin, meanwhile, worsened to 45.5%, from 47.1% in the year ago period and 47.5% in the fiscal third quarter. 

Looking ahead, Applied Materials expects the first half of fiscal 2008 to be challenging, and forecast semiconductor capital expenditures to be down roughly 5% to 15% during the year.  For the current first quarter, the company projected earnings in a range of $0.16 to $0.20 per share, with revenue down 13% to 18% sequentially.  Analysts, however, had forecast earnings of $0.27 per share, ex-items, on revenue of about $2.32 billion.