What's in Store for Applied Materials (AMAT) in Q3 Earnings?
Applied Materials, Inc. AMAT is set to report third-quarter fiscal 2023 results on Aug 17.
For the fiscal third quarter, AMAT expects net sales of $6.15 billion (+/-$400 million). The Zacks Consensus Estimate for revenues is pegged at $6.16 billion, suggesting a decline of 5.6% from the year-ago fiscal quarter’s reading.
Applied Materials projects non-GAAP earnings per share in the band of $1.56-$1.92. The Zacks Consensus Estimate for earnings is pegged at $1.73, indicating a fall of 10.8% from the year-ago fiscal quarter’s reported figure.
AMAT’s bottom line surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average earnings surprise being 10.22%.
Applied Materials, Inc. Price and EPS Surprise
Applied Materials, Inc. price-eps-surprise | Applied Materials, Inc. Quote
Factors to Consider
Applied Materials’ portfolio strength, expanding position in memory and increasing new design wins are likely to have driven its performance in the fiscal third quarter.
Growth opportunities across specialty nodes and new nodes ramping across foundry, logic, NAND and DRAM are expected to have benefited AMAT in the to-be-reported fiscal quarter. The company is anticipated to have witnessed solid customer momentum across automotive and advanced packaging owing to rising foundry logic spending.
However, weakening market conditions might have been concerns. Softness in demand for consumer electronics and sluggish memory spending due to weakness in the PC and smartphone markets are likely to have remained major headwinds.
All these factors are expected to get reflected in the Semiconductor Systems Group sales. For third-quarter fiscal 2023, the company’s sales projection for the segment stands at $4.5 billion. The Zacks Consensus Estimate for the same is pegged at $4.499 billion, indicating a decline of 5% from the year-ago quarter.
In the Applied Global Services (AGS) segment, AMAT’s growing 200-millimeter business and solid momentum among long-term service agreements are likely to have driven segmental sales in the quarter under review.
For third-quarter fiscal 2023, Applied Materials’ projection for AGS sales is pegged at $1.43 billion. The Zacks Consensus Estimate for the same is pegged at $1.429 billion, indicating growth of 0.6% from the year-ago quarter.
However, Applied Materials is likely to have continued suffering from sluggishness in its Display and Adjacent Markets segment in the fiscal quarter under review. For third-quarter fiscal 2023, AMAT’s projection for this segment’s sales is $170 million. The Zacks Consensus Estimate for the same is pegged at $169 million, indicating a fall of 49.2% from the year-ago 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.
Applied Materials has a Zacks Rank #3 and an Earnings ESP of 0.00% . You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks that you may consider, as our model shows that they have the right combination of elements to beat on earnings this season.
Bilibili BILI has an Earnings ESP of +2.44% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bilibili is scheduled to release second-quarter 2023 results on Aug 17. The Zacks Consensus Estimate for BILI’s loss is pegged at 41 cents per share. The company had reported a loss of 75 cents per share in the year-ago quarter.
Walmart WMT has an Earnings ESP of +1.07% and currently carries a Zacks Rank #2.
Walmart is set to report second-quarter fiscal 2024 results on Aug 17. The Zacks Consensus Estimate for WMT’s earnings is pinned at $1.68 per share.
Bank of Montreal BMO has an Earnings ESP of +1.91% and a Zacks Rank #3 at present.
Bank of Montreal is scheduled to report third-quarter fiscal 2023 results on Aug 29. The Zacks Consensus Estimate for BMO’s earnings is pegged at $2.27 per share.
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