Applied Materials : Applied Materials Announces First Quarter Results

    Applied Materials : Applied Materials Announces First Quarter Results

  *First quarter non-GAAP EPS of 6 cents at high end of outlook; GAAP EPS of
    3 cents

  *Orders grew 44 percent sequentially led by demand for semiconductor and
    display equipment

  *Company expects strong sequentialnet sales and EPS growth in the second
    quarter of 2013

SANTA CLARA, Calif., February 13, 2013 - Applied Materials, Inc.
(NASDAQ:AMAT), the global leader in manufacturing solutions for the
semiconductor, display and solar industries, today reported results for its
first quarter of fiscal 2013 ended January 27, 2013.

Applied generated orders of $2.11 billion and net sales of $1.57 billion. The
company reported operating income of $39 million and net income of $34 million
or 3 cents per diluted share. Non-GAAP operating income was $112 million, and
non-GAAP net income was $69 million or 6 cents per share, at the high end of
the business outlook.

"We executed well through the bottom of this industry investment cycle and,
with our semiconductor orders up over 80 percent from the previous quarter, we
areoptimistic about the potential of our markets this year," said Mike
Splinter, chairman and chief executive officer. "2013 looks to be another
strong year for mobile products like smartphones and tablets, and customers
are increasingly turning to Applied to help solve the technology challenges
they face in this growing market."

Quarterly Results Summary

          GAAP Results              Q1 FY2013      Q4 FY2012       Q1 FY2012
           Net sales              $1.57 billion  $1.65 billion   $2.19 billion
    Operating income (loss)        $39 million   $(499) million  $179 million
       Net income (loss)           $34 million   $(515) million  $117 million
  Diluted earnings (loss) per
          share (EPS)                 $0.03         $(0.42)          $0.09
        Non-GAAP Results
   Non-GAAP operating income      $112 million    $114 million   $344 million
      Non-GAAP net income          $69 million    $70 million    $240 million
      Non-GAAP diluted EPS            $0.06          $0.06           $0.18

Applied's non-GAAP results exclude the impact of the following, where
applicable: certain discrete tax items; restructuring charges and any
associated adjustments; certain acquisition-related costs; and impairments of
assets, goodwill, or investments. A reconciliation of the GAAP and non-GAAP
results is provided in the financial tables included in this release. See also
"Use of Non-GAAP Financial Measures" below.

First Quarter Reportable Segment Results and Comparisons to the Prior Quarter

Silicon Systems Group (SSG) orders were $1.36 billion, up 84 percent primarily
due to increased demand in foundry and memory, partially offset by lower
orders in logic. Net sales were $969 million, up 11 percent. Non-GAAP
operating income increased to $180 million or 18.6 percent of net sales. GAAP
operating income increased to $134 million or 13.8 percent of net sales. New
order composition was: foundry 73 percent, logic and other 12 percent, flash 8
percent, and DRAM 7 percent.

Applied Global Services (AGS) orders were $544 million, down 6 percent
primarily due to lower orders of 200mm equipment. Net sales were $471 million,
down 24 percent from the prior quarter which benefited from the sale of a thin
film production line. Non-GAAP operating income decreased to $91 million or
19.3 percent of net sales. GAAP operating income decreased to $89 million or
18.9 percent of net sales.

Display orders were $138 million, up 66 percent from low levels. Net sales
were $87 million, down 6 percent. Non-GAAP operating income increased to $5
million or 5.7 percent of net sales. GAAP operating income remained at $3
million or 3.4 percent of net sales.

Energy and Environmental Solutions (EES) orders were $68 million, up 5 percent
from low levels, with the majority of orders for web coating equipment. Net
sales were $46 million, down 26 percent. EES had a non-GAAP operating loss of
$44 million and a GAAP operating loss of $54 million.

Additional Quarterly Financial Information

  *Backlog increased by 31 percent sequentially to $2.11 billion including
    negative adjustments of $40 million.

  *Gross margin was 39.8 percent on a non-GAAP basis, up from 38.4 percent
    in the prior quarter due to a more favorable product mix. GAAP gross
    margin was 37.0 percent.

  *Operating expenses were $514 million on a non-GAAP basis, below the
    company's expectation due to approximately $20 million in favorable
    expense items. GAAP operating expenses were $543 million.

  *The effective tax rate was 24.2 percent on a non-GAAP basis. The GAAP
    effective tax rate was a benefit of 88.9 percent, reflecting the favorable
    resolution of a tax audit and the reinstatement of the U.S. R&D tax
    credit.

  *The company paid $108 million in cash dividends and used $48 million to
    repurchase 4 million shares of its common stock.

  *Cash, cash equivalents and investments ended the quarter at $2.82
    billion.

Business Outlook

For the second quarter of fiscal 2013, Applied expects net sales to be up 15
to 25 percent sequentially. The company expects non-GAAP EPS to be in the
range of $0.09 to $0.15. The non-GAAP EPS outlook excludes known charges
related to completed acquisitions of approximately $0.04 per share but does
not exclude other non-GAAP adjustments that may arise subsequent to this
release.

Use of Non-GAAP Financial Measures

Management uses non-GAAP results to evaluate the company's operating and
financial performance in light of business objectives and for planning
purposes. These measures are not in accordance with GAAP and may differ from
non-GAAP methods of accounting and reporting used by other companies. Applied
believes these measures enhance investors' ability to review the company's
business from the same perspective as the company's management and facilitate
comparisons of this period's results with prior periods. The presentation of
this additional information should not be considered a substitute for results
prepared in accordance with GAAP.

Webcast Information

Applied Materials will discuss these results during an earnings call that
begins at 1:30 p.m. Pacific Time today. A live webcast will be available at
www.appliedmaterials.com. A replay will be available on the website beginning
at 5:00 p.m. Pacific Time today.

Forward-Looking Statements

This press release contains forward-looking statements, including statements
regarding Applied's performance, industry conditions, market outlook,
opportunities and business outlooks for the second quarter of fiscal 2013,
and include the assumptions that underlie such statements. These statements
are subject to known and unknown risks and uncertainties that could cause
actual results to differ materially from those expressed or implied by such
statements, including but not limited to: the level of demand for Applied's
products, which is subject to many factors, including uncertain global
economic and industry conditions, end-demand for electronic products and
semiconductors, and customers' new technology and capacity requirements;
variability of operating expenses and results among the company's segments
caused by differing conditions in the served markets; the concentrated nature
of Applied's customer base; Applied's ability to (i)develop, deliver and
support a broad range of products, expand its markets and develop new markets,
(ii)timely align its cost structure with business conditions and achieve the
intended objectives of cost-reduction activities, (iii)plan and manage its
resources and production capability, (iv)obtain and protect intellectual
property rights in key technologies, (v)attract, motivate and retain key
employees, and (vi)accurately forecast future results, which depends on
multiple assumptions related to, without limitation, market conditions,
customer requirements and business needs; and other risks described in
Applied's SEC filings, including its Form 10-K for the fiscal year ended
October 28, 2012. All forward-looking statements are based on management's
estimates, projections and assumptions as of the date hereof. The company
undertakes no obligation to update any forward-looking statements.

About Applied Materials

Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in providing
innovative equipment, services and software to enable the manufacture of
advanced semiconductor, flat panel display and solar photovoltaic products.
Our technologies help make innovations like smartphones, flat screen TVs and
solar panels more affordable and accessible to consumers and businesses around
the world. Learn more at www.appliedmaterials.com.

Contact:

Kevin Winston (editorial/media) 408.235.4498
Michael Sullivan (financial community) 408.986.7977


                           APPLIED MATERIALS, INC.
          UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                                                  Three Months Ended
(In millions, except per share           January27,  October28,  January29,
amounts)                                   2013         2012         2012
Net sales                                $   1,573    $   1,646    $    2,189
Cost of products sold                          991        1,060         1,403
Gross margin                                   582          586           786
Operating expenses:
  Research, development and
     engineering                               304          303           304
     Selling, general and
     administrative                            230          237           303
     Impairment of goodwill                      -          421             -
     Restructuring charges and asset
     impairments                                 9          124             -
Total operating expenses                       543        1,085           607
Income (loss) from operations                   39         (499 )         179
Impairment of strategic investments              -           14             -
Interest and other expenses                     24           24            24
Interest and other income, net                   3            5             4
Income (loss) before income taxes               18         (532 )         159
Provision (benefit) for income taxes           (16 )        (17 )          42
Net income (loss)                        $      34    $    (515 )  $      117
Earnings (loss) per share:
  Basic and diluted                   $    0.03    $   (0.42 )  $     0.09
Weighted average number of shares:
  Basic                                   1,198        1,220         1,299
     Diluted                                 1,212        1,220         1,310

                           APPLIED MATERIALS, INC.
               UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

                                                      January27,  October28,
(In millions)                                           2013         2012
ASSETS
Current assets:
     Cash and cash equivalents                     $    1,523   $    1,392
        Short-term investments                               230          545
        Accounts receivable, net                           1,109        1,220
        Inventories                                        1,278        1,272
        Other current assets                                 625          673
Total current assets                                       4,765        5,102
Long-term investments                                      1,062        1,055
Property, plant and equipment, net                           900          910
Goodwill                                                   3,518        3,518
Purchased technology and other intangible assets,
net                                                        1,302        1,355
Deferred income taxes and other assets                       167          162
Total assets                                          $   11,714   $   12,102
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable and accrued expenses         $    1,287   $    1,510
        Customer deposits and deferred revenue               678          755
Total current liabilities                                  1,965        2,265
Long-term debt                                             1,946        1,946
Other liabilities                                            662          656
Total liabilities                                          4,573        4,867
Total stockholders' equity                                 7,141        7,235
Total liabilities and stockholders' equity            $   11,714   $   12,102

                           APPLIED MATERIALS, INC.
          UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                                  Three Months Ended
                                         January27,  October28,  January29,
(In millions)                               2013         2012         2012
Cash flows from operating activities:
 Net income (loss)                    $      34    $    (515 )  $     117
    Adjustments required to reconcile
    net income (loss) to cash provided
    by operating activities:
      Depreciation and
            amortization                       106           97          112
            Impairment of goodwill               -          421            -
            Restructuring charges and
            asset impairments                    9          124            -
            Deferred income taxes and
            other                              (78 )         64           39
            Impairment of strategic
            investments                          -           14            -
            Share-based compensation            42           44           53
            Net change in operating
            assets and liabilities, net
            of amounts acquired                (97 )        162         (140 )
Cash provided by operating activities           16          411          181
Cash flows from investing activities:
 Capital expenditures                       (49 )        (41 )        (37 )
    Cash paid for acquisition, net of
    cash acquired                                -           (1 )     (4,179 )
    Proceeds from sales and maturities
    of investments                             445          254          313
    Purchases of investments                  (143 )       (175 )       (254 )
Cash provided by (used in) investing           253           37       (4,157 )
activities
Cash flows from financing activities:
 Proceeds from common stock issuances        18           45            2
    Common stock repurchases                   (48 )       (516 )       (200 )
    Payments of dividends to
    stockholders                              (108 )       (111 )       (104 )
Cash used in financing activities             (138 )       (582 )       (302 )
Effect of exchange rate changes on cash
and cash equivalents                             -           (3 )         (1 )
Increase (decrease) in cash and cash           131         (137 )     (4,279 )
equivalents
Cash and cash equivalents- beginning of
period                                       1,392        1,529        5,960
Cash and cash equivalents- end of       $   1,523    $   1,392    $   1,681
period
Supplemental cash flow information:
 Cash payments for income taxes       $      32    $      10    $      33
    Cash refunds from income taxes       $      65    $      74    $       3
    Cash payments for interest           $      39    $       7    $      41

                           APPLIED MATERIALS, INC.
                      UNAUDITED SUPPLEMENTAL INFORMATION

Reportable Segment Results

                      Q1 FY2013                      Q4 FY2012                      Q1 FY2012
                                Operating                      Operating                      Operating
(In           New       Net      Income      New       Net      Income      New       Net      Income
millions)   Orders    Sales     (Loss)     Orders    Sales     (Loss)     Orders    Sales     (Loss)
SSG         $ 1,363   $   969   $   134    $   741   $   870   $    41    $ 1,418   $ 1,344   $   271
AGS             544       471        89        576       621       164        517       534       107
Display         138        87         3         83        93         3         40       104         5
EES              68        46       (54 )       65        62      (480 )       33       207       (23 )
Corporate         -         -      (133 )        -         -      (227 )        -         -      (181 )
Consol-
idated      $ 2,113   $ 1,573   $    39    $ 1,465   $ 1,646   $  (499 )  $ 2,008   $ 2,189   $   179



Corporate Unallocated Expenses

(In millions)                                 Q1 FY2013  Q4 FY2012  Q1 FY2012
Restructuring charges and asset impairments,
net                                            $      4   $    111   $      -
Share-based compensation                             42         44         53
Other unallocated expenses                           87         72        128
Corporate                                      $    133   $    227   $    181

                           APPLIED MATERIALS, INC.
                      UNAUDITED SUPPLEMENTAL INFORMATION

Additional Information

                                    Q1 FY2013      Q4 FY2012      Q1 FY2012
New Orders and Net Sales by
Geography
                                    New     Net    New     Net    New     Net
(In $ millions)                   Orders  Sales  Orders  Sales  Orders  Sales
United States                       391    401     435    373    467    417
        % of Total                19 %   25 %    30 %   23 %    23 %   19 %
Europe                              134    119     165    271     209    179
        % of Total                 6 %    8 %    11 %   16 %    11 %    8 %
Japan                               181     98     184    129     167    217
        % of Total                 9 %    6 %    12 %    8 %     8 %   10 %
Korea                               198    205     115    127     666    628
        % of Total                 9 %   13 %     8 %    8 %    33 %   29 %
Taiwan                              906    565     390    457     367    489
        % of Total                43 %   36 %    27 %   28 %    18 %   22 %
Southeast Asia                       65     58      74     97      50     79
        % of Total                 3 %    4 %     5 %    6 %     3 %    4 %
China                               238    127     102    192      82    180
        % of Total                11 %    8 %     7 %   11 %     4 %    8 %
Employees (In thousands)
Regular Full Time                         13.7           14.5           14.6

                           APPLIED MATERIALS, INC.
             UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

                                                  Three Months Ended
                                         January27,  October28,  January29,
(In millions, except percentages)          2013         2012         2012
Non-GAAP Gross Margin
Reported gross margin (GAAP basis)       $    582     $    586     $    786
Certain items associated with
acquisitions^1                                 43           46          104
Acquisition integration and deal costs          1            -            -
Non-GAAP gross margin                    $    626     $    632     $    890
Non-GAAP gross margin percent (% of
net sales)                                   39.8 %       38.4 %       40.7 %
Non-GAAP Operating Income
Reported operating income (loss) (GAAP
basis)                                   $     39     $   (499 )   $    179
Certain items associated with
acquisitions^1                                 54           55          115
Acquisition integration and deal costs         10           13           50
Impairment of goodwill                          -          421            -
Restructuring charges and asset
impairments^2, 3                                9          124            -
Non-GAAP operating income                $    112     $    114     $    344
Non-GAAP operating margin percent (%
of net sales)                                 7.1 %        6.9 %       15.7 %
Non-GAAP Net Income
Reported net income (loss) (GAAP
basis)                                   $     34     $   (515 )   $    117
Certain items associated with
acquisitions^1                                 54           55          115
Acquisition integration and deal costs         10           13           50
Impairment of goodwill                          -          421            -
Restructuring charges and asset
impairments^2, 3                                9          124            -
Impairment of strategic investments             -           14            -
Reinstatement of federal R&D tax
credit                                        (10 )          -            -
Resolution of audits of prior years'
income tax filings                            (11 )         (5 )          -
Income tax effect of non-GAAP
adjustments                                   (17 )        (37 )        (42 )
Non-GAAP net income                      $     69     $     70     $    240



1 These  items  are   incremental  charges   attributable  to   acquisitions, 
   consisting of  inventory  fair  value adjustments  on  products  sold,  and 
   amortization of purchased intangible assets.
2  Results for the three months ended January 27, 2013 included $4 million  of 
   employee-related costs, net, related to the restructuring program announced
   on October 3, 2012, asset impairment  charges of $3 million related to  the 
   restructuring program announced on May 10, 2012 and severance charges of $2
   million related to the integration of Varian.
3 Results for the three months ended October 28, 2012 included severance  and 
   other employee-related costsof $106  million related to the  restructuring 
   program announced on  October 3, 2012,  restructuring and asset  impairment 
   charges of $12 million  related to the  restructuring program announced  on 
   May  10,  2012,  and  severance  charges  of  $6  million  related  to  the 
   integration of Varian.

                           APPLIED MATERIALS, INC.
             UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

                                           Three Months Ended
(In millions except per
share amounts)           January27, 2013  October28, 2012  January29, 2012
Non-GAAP Earnings Per
Diluted Share
Reported earnings
(loss) per diluted
share (GAAP basis)        $       0.03      $      (0.42 )    $        0.09
Certain items
associated with
acquisitions                      0.03              0.04               0.07
Acquisition integration
and deal costs                    0.01              0.01               0.02
Impairment of goodwill               -              0.34                  -
Restructuring charges
and asset impairments             0.01              0.08                  -
Impairment of strategic
investments                          -              0.01                  -
Reinstatement of
federal R&D tax credit
and resolution of
audits of prior years'
income tax filings               (0.02 )               -                  -
Non-GAAP earnings per
diluted share             $       0.06      $       0.06      $        0.18
Weighted average number
of diluted shares                1,212             1,234              1,310

                           APPLIED MATERIALS, INC.
             UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

                                                  Three Months Ended
                                         January27,  October28,  January29,
(In millions, except percentages)          2013         2012         2012
Non-GAAP SSG Operating Income
Reported operating income (GAAP basis)   $   134      $     41     $   271
Certain items associated with
acquisitions^1                                44            45         101
Acquisition integration and deal costs         1             6          14
Restructuring charges and asset
impairments^2, 3                               1             3           -
Non-GAAP operating income                $   180      $     95     $   386
Non-GAAP operating margin percent (%
of net sales)                               18.6 %        10.9 %      28.7 %
Non-GAAP AGS Operating Income
Reported operating income (GAAP basis)   $    89      $    164     $   107
Certain items associated with
acquisitions^1                                 1             3           6
Restructuring charges and asset
impairments^2, 3                               1             4           -
Non-GAAP operating income                $    91      $    171     $   113
Non-GAAP operating margin percent (%
of net sales)                               19.3 %        27.5 %      21.2 %
Non-GAAP Display Operating Income
Reported operating income (GAAP basis)   $     3      $      3     $     5
Certain items associated with
acquisitions^1                                 2             1           2
Non-GAAP operating income                $     5      $      4     $     7
Non-GAAP operating margin percent (%
of net sales)                                5.7 %         4.3 %       6.7 %
Non-GAAP EES Operating Income
Reported operating loss (GAAP basis)     $   (54 )    $   (480 )   $   (23 )
Certain items associated with
acquisitions^1                                 7             7           6
Impairment of goodwill                         -           421           -
Restructuring charges and asset
impairments^2, 3                               3             6           -
Non-GAAP operating loss                  $   (44 )    $    (46 )   $   (17 )
Non-GAAP operating margin percent (%
of net sales)                              (95.7 )%      (74.2 )%     (8.2 )%

1 These items are incremental charges attributable to acquisitions,
   consisting of inventory fair value adjustments on products sold, and
   amortization of purchased intangible assets.
2  Results for the three months ended January 27, 2013 included asset
   impairment charges of $3 million related to the restructuring program
   announced on May 10, 2012 and severance charges of $2 million related to
   the integration of Varian.
3 Results for the three months ended October 28, 2012 included restructuring
   and asset impairment charges of $7 million related to the restructuring
   program announced on May 10, 2012, and severance charges of $6 million
   related to the integration of Varian.

                           APPLIED MATERIALS, INC.
       UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP OPERATING EXPENSES

                                                    Three Months Ended
(In millions)                               January27, 2013  October28, 2012
Operating expenses (GAAP basis)             $       543       $      1,085
Certain items associated with acquisitions          (11 )               (9 )
Acquisition integration and deal costs               (9 )              (13 )
Impairment of goodwill                                -               (421 )
Restructuring charges and asset impairments          (9 )             (124 )
Non-GAAP operating expenses                 $       514       $        518

    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE

                                                           Three Months Ended
(In millions, except percentages)                            January27, 2013
Provision (benefit) for income taxes (GAAP basis) (a)          $    (16 )
Reinstatement of federal R&D tax credit                              10
Resolutions from audits of prior years' income tax filings           11
Income tax effect of non-GAAP adjustments                            17
Non-GAAP provision for income taxes (b)                        $     22
Income before income taxes (GAAP basis) (c)                    $     18
Certain items associated with acquisitions                           54
Acquisition integration costs                                        10
Restructuring charges and asset impairments                           9
Non-GAAP income before income taxes (d)                        $     91
Effective income tax rate (GAAP basis) (a/c)                      (88.9 )%
Non-GAAP effective income tax rate (b/d)                           24.2 %

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