Applied Materials (AMAT) Higher After Beat-and-Raise Qtr, Will It Last?

Shares of Applied Materials Inc. (Nasdaq: AMAT) are 3% higher today following better-than-expected third quarter results and guidance after the close.

Applied Materials reported break-even Q3 earnings, topping the Street's consensus estimate by 8 cents. Sales for the quarter came in at $1.13 billion, down about 39% from the same quarter last year, but better than the $958 million analysts had been looking for. On AMAT's conference call, execs said it sees Q4 sales up 10-20% from Q3 and Q4 EPS $0.00-$0.04, both of which are well ahead of the Street's current estimates.

Wall Street was impressed with the results and a number of firm's lifted estimates and price target following the release. Piper Jaffray, which had an Overweight rating on the stock going into the number, raised their price target to $19 per share. The firm thinks AMAT can continue to growth market share in the semiconductor business and expects the company to continue to drive down operating costs. They believe the company is likely to exceed its prior earnings peak.

Analysts at Kaufman Brothers were more restrained about the results, saying the growth reflected the upsurge in capacity utilization at the semiconductor companies but they said it isn't clear how long this will continue as it is ultimately tied to consumer spending. They also note the company's solar segment continues to languish.

You May Also Be Interested In

• Applied Materials (AMAT) Reiterated at Buy by Stifel on 3rd Quarter of Sequential Growth
• Applied Materials (AMAT) PT Lowered to $642 at Morgan Stanley
• Applied Materials to Participate in Upcoming Investor Conferences