Boston, MA 05/28/2014 (wallstreetpr) – Applied Materials, Inc. (NASDAQ:AMAT) generated $2.63 billion of orders during its 2Q2014 ended April 27, 2014. The 15% YoY growth in orders was due to increase in Display and Silicon Systems.
The increasing orders improved the Company’s net sales by 7% to $2.35 billion and increased adjusted (non-GAAP) gross margin by 170 basis points (bps) to 44.2%. Accordingly, adjusted operating margin grew to 20.5% with adjusted operating income of $482 million (+69%) and adjusted diluted EPS to $0.28 (+71%).
Segment results
In 2Q2014, Silicon Systems Group (SSG) orders were $1.66 billion, which comprises of foundry (50%), flash (21%), DRAM (17%) and logic/other (12%). The 6% YoY increase was due to higher orders in DRAM and logic/other products that offset the decline in orders of foundry and flash products. Hence, SSG’s net sales increased by 7% YoY to $1.58 billion and improved the margin to 27.3% with adjusted operating income of $433 million.
But, Applied Global Services (AGS) segment showed a decline in orders in 2Q2014, which was by 10% to $537 million as renewals of the service contract were high. Despite low orders, AGS reported 5% YoY increase in net sales to $534 million that increased the segment margin to 28.1% with adjusted operating income of $150 million.
The increase in TV production capacity improved the orders of Display segment to $340 million (2Q2013: $79 million); however, failed to maintain the segment sales, which was down by 8% to $147 million. So, the segment’s adjusted operating income was $26 million with a margin of 17.7%.
Energy and Environmental Solutions (EES) orders also grew to $88 million that increase the net sales to $88 million and adjusted operating income to $7 million with a margin of 8%. Subsequent to EES re-bookings, the total backlog grew by 12% sequentially to $2.74 billion, which comprises of SSG (53%), AGS (24%), Display (17%) and EES (6%).
At the end
Applied Materials, Inc. (NASDAQ:AMAT) also expects that the trend will continue in 3Q2014 and anticipates 13% to 19% increase in net sales and 39% to 61% increase in adjusted diluted EPS.
