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What's in the Cards for Applied Materials (AMAT) Q4 Earnings?

Zacks Equity Research
·4 min read

Applied Materials, Inc. AMAT is set to report fourth-quarter fiscal 2022 results on Nov 17.

For the fiscal fourth quarter, AMAT expects net sales of $6.4 billion (+/- 250 million). The Zacks Consensus Estimate for revenues is pegged at $6.4 billion, suggesting growth of 4.5% from the year-ago fiscal quarter’s reading.

Applied Materials projects non-GAAP earnings of $1.54-$1.78 per share. The Zacks Consensus Estimate for earnings is pegged at $1.73 per share, indicating a decline of 10.8% from the year-ago fiscal quarter’s reported figure.

AMAT’s bottom line surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed the same once and matched the mark on another occasion, the average earnings surprise being 2.26%.

Applied Materials, Inc. Price and EPS Surprise

Applied Materials, Inc. Price and EPS Surprise
Applied Materials, Inc. Price and EPS Surprise

Applied Materials, Inc. price-eps-surprise | Applied Materials, Inc. Quote

Factors to Consider

Applied Materials is likely to have persistently suffered supply-chain disruptions during the fiscal fourth quarter.

Further, sluggishness in memory spending, weak demand in the consumer electronics space and softness in AMAT’s 200mm equipment business are expected to impact the upcoming results negatively.

Additionally, escalating tensions between the United States and China inducing new export checks by the U.S. regime to cripple the Chinese semiconductor companies, might have marred AMAT’s financial prospects in the to-be-reported quarter.

The export curbs prompted AMAT to stop its shipment of equipment in the quarter under review to wholly-China-owned factories that manufacture advanced logic chips. This is likely to have hurt top-line growth in the fiscal fourth quarter.

Nevertheless, Applied Materials’ portfolio strength, expanding position in memory and increasing new design wins are likely to have driven its performance in the fiscal fourth quarter.

Growth opportunities across specialty nodes and new nodes ramp across foundry, logic, NAND and DRAM are expected to have benefited AMAT in the to-be-reported fiscal quarter.

The growing adoption of IoT, AI and Big Data is expected to have contributed to the performance in the fiscal fourth quarter.

Further, strengthening ICAPS portfolio is expected to have benefited the company in the quarter under review.

However, Applied Materials is likely to have continued suffering sluggishness in its Display and Adjacent Markets segment in the fiscal quarter under review.

Uncertainties related to the COVID-19 pandemic are likely to have induced headwinds to AMAT in the soon-to-be-reported fiscal quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Applied Materials this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is precisely the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Applied Materials has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.

Analog Devices ADI has an Earnings ESP of +1.10% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices is scheduled to release fourth-quarter fiscal 2022 results on Nov 22. The Zacks Consensus Estimate for ADI’s earnings is pegged at $2.58 per share, suggesting a 49.1% increase from the prior-year fiscal quarter’s reported figure.

Adobe ADBE has an Earnings ESP of +0.45% and a Zacks Rank of 3 at present.

Adobe is scheduled to release fourth-quarter fiscal 2022 results on Dec 15. The Zacks Consensus Estimate for ADBE’s earnings is pegged at $3.50 per share, suggesting a 9.4% rise from the prior-year fiscal quarter’s reported figure.

Dollar Tree DLTR has an Earnings ESP of +6.57% and is presently Zacks #3 Ranked.

Dollar Tree is set to report third-quarter 2022 results on Nov 22. The Zacks Consensus Estimate for DLTR’s earnings is pegged at $1.16 per share, suggesting a 20.8% increase from the prior-year fiscal period’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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