Q2 Earnings Recap: Applied Materials (NASDAQ:AMAT) Tops Semiconductor Manufacturing Stocks
Wrapping up Q2 earnings, we look at the numbers and key takeaways for the semiconductor manufacturing stocks, including Applied Materials (NASDAQ:AMAT) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers and data storage. The growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a slower Q2; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 1.39% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again and semiconductor manufacturing stocks have not been spared, with share prices down 11.8% since the previous earnings results, on average.
Best Q2: Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.43 billion, down 1.46% year on year, beating analyst expectations by 4.29%. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates and optimistic revenue guidance for the next quarter.
“Applied Materials executed well in our fiscal third quarter, with revenue and earnings at the high end of our guidance range,” said Gary Dickerson, President and CEO.
Applied Materials pulled off the strongest analyst estimates beat of the whole group. The stock is up 1.59% since the results and currently trades at $139.59.
Is now the time to buy Applied Materials? Access our full analysis of the earnings results here, it's free.
KLA Corporation (NASDAQ:KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $2.36 billion, down 5.29% year on year, beating analyst expectations by 4.19%. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates. On the other hand, its inventory levels materially increased and its gross margin shrunk.
The stock is down 4.14% since the results and currently trades at $462.64.
Is now the time to buy KLA Corporation? Access our full analysis of the earnings results here, it's free.
Weakest Q2: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of most of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers that are used for cutting, welding and processing raw materials.
IPG Photonics reported revenues of $340 million, down 9.83% year on year, missing analyst expectations by 1.79%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
The stock is down 27.5% since the results and currently trades at $95.3.
Read our full analysis of IPG Photonics's results here.
Semtech (NASDAQ:SMTC)
Operating for more than 60 years, Semtech (NASDAQ:SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and Cloud connectivity.
Semtech reported revenues of $238.4 million, up 13.9% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
The stock is down 1.88% since the results and currently trades at $22.43.
Read our full, actionable report on Semtech here, it's free.
Marvell Technology (NASDAQ:MRVL)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.34 billion, down 11.6% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a strong improvement in inventory levels. We were also glad that its EPS outperformed Wall Street's estimates. On the other hand, its free cash flow fell short of analysts' expectations, and its gross and operating margins regrettably declined.
The stock is down 6.83% since the results and currently trades at $53.37.
Read our full, actionable report on Marvell Technology here, it's free.
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The author has no position in any of the stocks mentioned
