Applied Materials Stock: How will it perform after the Q3 report?

Applied Materials (AMAT) specializes in manufacturing equipment for the global semiconductor industry. It is a top player in materials engineering solutions used to design new chips and advanced displays for customers around the world. The company has been enjoying strong demand for its equipment, mainly due to semiconductors shortage worldwide.

The elevated demand helped Applied Materials stock advance nearly 50 percent on a year-to-date basis. The stock once again caught investors’ attention on Thursday after announcing record financial results for the third quarter ended August 1.

Financial Results: Q3

Applied Materials reported earnings of $1.87 per share for the quarter, more than doubled from 91 cents per share in the comparable period of 2020. Excluding certain items, its adjusted earnings of $1.90 per share easily surpassed the consensus forecast of $1.77 per share.

Total revenue for the quarter climbed 41 percent on a year-over-year basis to $6.2 billion, beating analysts’ average estimate of $5.94 billion. The impressive quarterly performance was once again driven by the global chip shortage amid a sharp surge in demand from the automotive and electronics industries.

Applied Materials also issued its financial outlook for the fourth quarter. The company expects adjusted earnings in the range of $1.87 per share to $2.01 per share for the current quarter, better than the consensus forecast of $1.81 per share. Revenue is expected between $6.08 billion to $6.58 billion, compared to analysts’ average estimate of $6.04 billion.

Bottomline

Applied Materials stock rose nearly 1.5 percent on Thursday on impressive quarterly performance. Moving forward, the stock will certainly gain more value considering its solid fourth-quarter outlook and elevated demand for its equipment.