Applied Materials misses expectations

The Associated Press
Wednesday May 16, 2001

SANTA CLARA — Applied Materials Inc., the world’s largest manufacturer of chip-making equipment, reported Tuesday a “severe decline” in earnings during the second quarter and missed Wall Street expectations by a penny. 

For the three months ended April 29, the company’s net income was $269 million, or 32 cents per diluted share, excluding one-time items. That’s down 41 percent from $459 million, or 53 cents per share, for the same period a year ago. 

Analysts surveyed by Thomson Financial/First Call predicted earnings of 33 cents per share. 

In the first quarter, the Santa Clara-based company warned it was being pinched as the U.S. economic downturn hurt its customers.  

As part of a cost-cutting effort, the company said it would offer severance packages to up to 1,000 employees, reduce its temporary work force, defer raises and shut down for five days in the second quarter. 

“Our business continued to experience a severe decline during the second quarter as decreased demand for electronic goods resulted in reduced capital equipment investment by semiconductor manufacturers,” said James C. Morgan, Applied’s chairman and chief executive. 

Net sales were $1.91 billion, down 30 percent from $2.73 billion in the same period a year ago, the company said. 

Applied Materials closed Tuesday at $49.89, up 20 cents, on the Nasdaq Stock Market. It was at $49.95 in after-hours trading.