Applied Materials Inc, the giant Santa Clara-based maker of semiconductor fabrication equipment, has fallen foul of the market depression hitting most of its customers, and has pre- announced some less than excellent results for its third quarter. The good news is that the company still expects to make profits of $0.15 per share. But the bad news is that these figures don’t include a proposed $30m restructuring charge which the company has also scheduled for the third quarter, to cover the cost of a voluntary separation plan. Including the charge, the company now expects earnings to fall as low as $0.10 per share, down 80% on last year, on revenues as low as $850m, down 20%. Despite all the warning flags, the consensus of earnings estimates was that the company would hit $0.21 per share (before charges). Applied Materials, which ranks as the biggest supplier of wafer fabrication equipment in the world, and to whom Intel is the biggest single customer, said that delays in orders from chip manufacturing clients had been more sever than originally anticipated. Alongside the 20% fall in third quarter revenues to $850m, the company said orders in the pipeline were down as low as $600m to $675m, so things are getting worse not better. The company blamed its predicament on the three most common scapegoats, Asia, the collapse of DRAM prices and a lack of demand for personal computers. Applied Materials results are due to be announced on August 11. Intel Corp is due to report its earnings on July 14 after the close of markets.
