Applied Materials Profit Falls; Orders Top Estimates (Update3)
By Ian King
Feb. 12 (Bloomberg) -- Applied Materials Inc. reported a 35 percent drop in fiscal first-quarter profit after chip- equipment sales fell. Orders for machines that make flat screens surged, lifting the shares 5.2 percent in extended trading.
Net income declined to $262.4 million, or 19 cents a share, from $403.5 million, or 29 cents, a year earlier, Santa Clara, California-based Applied Materials said today in a statement. The company said orders would rise as much as 5 percent this quarter, exceeding some analysts' estimates.
Applied Materials, the biggest maker of chip equipment, is expanding into machinery for flat-screen displays and solar panels as demand from semiconductor companies slows. The new orders helped offset a slump in memory chips, which has forced some of its biggest customers to curb expansion plans.
``They are still expecting the flat panel and the solar business to keep this fairly high run rate,' said Bill Ong, a San Francisco-based analyst for American Technology Research, who has a neutral rating on the shares. ``The stock will probably trade up tomorrow.'
Applied rose 93 cents to $19 in extended trading after the report. The stock had fallen 36 cents to $18.07 in regular Nasdaq Stock Market trading. The shares dropped 3.7 percent last year.
Sales Forecast
Sales in the first quarter, which ended Jan. 27, declined 8.3 percent to $2.09 billion.
Second-quarter sales will rise as much as 5 percent from the previous period, the company said on a conference call. The midpoint of its forecast range equates to $2.14 billion, topping the $2.07 billion estimated by analysts in a Bloomberg survey.
The company projected second-quarter earnings of 18 cents to 22 cents a share, compared with the 22 cents projected by analysts.
Orders, a sign of future sales, will range between a 5 percent drop and a 5 percent increase, Applied Materials said. Steven O'Rourke, an analyst at Deutsche Bank, had expected the company to predict a decline of as much as 10 percent.
First-quarter orders were $2.5 billion. That was a gain of 13 percent from the preceding three months and down 2 percent from a year earlier.
`Robust Demand'
The gain from the previous quarter ``reflects robust demand for our display products,' Chief Executive Officer Mike Splinter said in the statement.
Splinter had forecast that orders would drop between 5 percent and 15 percent last quarter, compared with the previous three months, as memory chipmakers cut spending.
Analysts had estimated a first-quarter profit of 20 cents a share and sales of $2 billion.
The company also announced plans to buy back $300 million to $500 million in stock this quarter.
South Korea's Hynix Semiconductor Inc., Germany's Qimonda AG and Japan's Elpida Memory Inc. all reported losses in their most recent quarters after prices for memory fell below the cost of production. Hynix and other chipmakers have cut their spending plans for this year.
Applied gets about 10 percent of its sales from liquid- crystal-display makers, which are boosting spending on new plants. The company also has about $700 million in contracts to equip solar panel plants.
The majority of its revenue comes from machines that add layers of metals and other materials to silicon wafers, turning them into computer chips.
The company accounts for about 20 percent of the $40 billion chip-equipment industry, so its results serve as an indicator of total demand. Investors also use its order figures to gauge confidence levels at customers such as Intel Corp. and Samsung Electronics Co. http://www.bloomberg.com/apps/news?pid=20601103&sid=aT1mTvHLWFyE&refer=us
Write-downs hurt Credit Suisse profit By ERNST E. ABEGG Associated Press Writer Article Last Updated: 02/12/2008 11:55:26 AM MST
ZURICH, Switzerland—Credit Suisse Group posted a write-down of 2.07 billion Swiss francs ($1.88 billion) for subprime-related assets on Tuesday as it said fourth-quarter earnings dropped 72 percent to 1.33 billion francs ($1.2 billion).
Switzerland's second-largest bank said its net subprime exposure is 1.6 billion francs ($1.45 billion), down sharply from 3.9 billion francs at the end of September—showing that Credit Suisse continues to weather the subprime crisis better than some. Its crosstown rival UBS AG, the largest Swiss bank, is expected to report a quarterly and yearly loss on Thursday.
Nonetheless, Credit Suisse said net profit in the three months ended Dec. 31 was down from the 4.67 billion francs recorded the previous year, when earnings were bolstered by investment banking and the sale of insurer Winterthur.
The bank also said it has received subpoenas and requests for information about subprime mortgages from regulators. The company said it faces a purported class-action lawsuit related to its role in underwriting mortgage pass-through certificates for a unit of Countrywide Financial Corp., the largest mortgage lender and home loan servicer in the U.S.
According to a filing Tuesday with the Securities and Exchange Commission, Credit Suisse is cooperating with the subpoenas and requests for information. Regulators asked for information about Credit Suisse's "origination, purchase, securitization and servicing of subprime and non-subprime residential mortgages and related issues," according to the filing.
Goldman Sachs Group Inc., Bear Stearns Cos. and Morgan Stanley previously have received requests for information related to subprime mortgages.
Credit Suisse said market turmoil still poses stiff challenges, but that it was confident of achieving a "superior performance" over various market cycles.
Chief Executive Brady W. Dougan said the results were "achieved in an extremely challenging environment."
Analysts praised Credit Suisse for its thorough disclosure compared with rivals, but analyst Derek De Vries of Merrill Lynch said its large exposure to mortgage securities and loans may translate to further markdowns.
Credit Suisse said net revenues for the quarter came to 9.4 billion francs ($8.5 billion), down 13 percent from 10.8 billion francs for the fourth quarter of 2006.
For the full year, net income was 8.5 billion francs ($7.7 billion), down 25 percent from 11.3 billion francs in 2006. Net revenues for the full year rose 6 percent to 40.9 billion francs ($37.2 billion) from 38.6 billion francs.
The bank proposed raising its dividend to 2.50 francs a share ($2.27), compared with 2.24 plus a par value reduction last year, and said it is already more than halfway through an 8 billion franc ($7.3 billion) share buyback plan, which it sped up last year.
The earnings were largely in line with market expectations, analysts said.
Standard & Poor's Ratings Services said today that its ratings and outlooks on Credit Suisse were unaffected by the company's fourth-quarter earnings statement. It sees Credit Suisse's "performance to date as relatively resilient, thanks mainly to the benefits of diversity at the group level, low exposures to (collateralized debt obligations), and extensive hedging activity."
XTO profit rises, sees higher '08 output Oil and gas producer XTO Energy Inc (XTO.N: Quote, Profile, Research) posted higher fourth-quarter profit on Tuesday, boosted by higher natural gas output, and raised its production growth target for 2008.
Net earnings in the quarter rose to $464 million, or 95 cents per share, from $429 million, or 92 cents per share, in the year-ago quarter.
Natural gas production in the quarter rose 36 percent from the previous year to an average of 1.67 billion cubic feet per day, while oil production rose 6 percent to 48,844 barrels per day.
The Fort Worth, Texas-based company raised its production forecast for 2008 to a 20 percent year-on-year increase from its previous estimate of 17 percent.
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