Applied Materials Report Strong Results Driven By SemiCap And Solar

According to J.P. Morgan, Applied Materials AMAT reported C4Q10 rev/EPS of $2.69bn/$0.36 vs. our ests. of $2.72/$0.34. J.P. Morgan reported that GMs of 42.3% were slightly lower than its estimate of 42.6%. “F11 guidance raised to >$11bn in revenue and >$1.50 PF EPS. This is well above our prior estimates of $10.2bn/$1.24 and primarily due to the expectation of higher semi & solar equipment related demand. The company now believes semi capex will increase 10-15% YoY and with management's expectation of share gain, this implies the company's SemiCap revenue growth will be incrementally higher. Solar orders were very strong as we expected and look to remain robust in the near term. However, our bearish view on the longer-term demand outlook for Solar PV keeps us cautious on Applied's outlook for solar-related equipment in the later part of the year and into C12.” Applied Materials closed yesterday at $16.12.