Applied Materials’ solar net sales set records in Q2, new orders exceed US$3 billion

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Applied Materials is set to be pleased with its second quarter 2011 financial results. The company saw orders and sales grow from Q1 2011 with their net sales exceeding the company’s earlier guidance. Orders for Q2 totaled US$3.19 billion while net sales reached US$2.86 billion, a 25% year-over-year improvement. Gross Margin took a slight hit by falling 0.8 points from Q1 2011 to 41.5% in the second quarter. The company advised that without the acquisition cost it sustained in Q2 2011, the gross margin would have been 41.9%.

AMAT’s Applied Global Services (AGS) unit saw orders in Q2 of US$603 million, a 9% upturn from Q1 2011. Net sales for the division set a record by increasing 8% to US$614 million, which Applied Materials attributes to higher shipments of 200mm equipment.  The Energy and Environmental Solutions (EES) division saw orders take an 8% sequential dip from Q1 2011 to US$612 million. However, EES set a net sales record of US$637 million, which amounts to a 34% improvement sequentially.

“We exceeded our guidance for net sales in the second quarter and delivered earnings per share at the high end of the range,” said George Davis, chief financial officer.  “During the quarter, we also raised our dividend by 14% to US$0.08 per share and generated operating cash flow of more than US$700 million.”

Applied Materials saw its new orders in Q2 2011 come from familiar locations. Taiwan accounted for 25% of its new orders in Q2, while North America and China made up 22% and 21%, respectively. Orders from Korea made up 12% of the second quarter’s new orders, up from the 8% it accounted for in Q1. Europe, however, dropped from supplying 12% of the orders in Q1 to 8% in Q2.

Applied’s outlook for Q3 2011 sees the company expecting its net sales to drop between 3% and 10% sequentially. “Applied delivered one of the best quarters in the company's history, including record net sales in our solar business,” said Mike Splinter, chairman and chief executive officer. “While near-term economic conditions have tempered our growth expectations, our outlook for the year remains strong driven by our customers' plans to invest in the advanced technologies needed to meet growing demand for mobile devices and consumer electronics.”

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