Applied Materials reported a surprise GAAP operating loss for its Energy and Environmental Solutions (EES) segment of US$322 million that included impairment charges of US$278 million. Non-GAAP operating loss was US$34 million.
The company reported EES segment net sales, which include its PV equipment elements, were down 17% to US$38 million, while new order intake was US$39 million, down 43%.
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EES backlog accounted for 6% of Applied Materials total backlog of US$2.3 billion, in the financial year second quarter. The majority of EES orders and backlog were non-PV related bookings, primarily web coating equipment.
Management noted in a call to discuss quarterly results that the conditions in the PV supply chain remain extremely challenging, resulting in further headcount reductions and cost reduction strategies. However, management did not provide further details on the job cuts and cost reduction plans.
The company said that the EES impairment charges reflected the further deterioration seen in the solar equipment market. Management said that it would further lower operational spending in EES to a quarterly run rate below US$25 million. The opex level is expected to decline to US$35 million in its financial year third quarter.
