Applied Materials, Inc. (NASDAQ:AMAT) today reported results for
its fourth quarter and fiscal year ended October 30, 2016.
Fourth quarter new orders were $3.03 billion, up 25 percent year
over year. Backlog of $4.58 billion was up 46 percent year over
year. Net sales of $3.30 billion were up 39 percent year over
year.
The company recorded fourth quarter gross margin of 42.4
percent, operating margin of 23.6 percent, and diluted earnings per
share (EPS) of $0.56. On a non-GAAP adjusted basis, fourth quarter
gross margin increased 1.5 points year over year to 43.7 percent,
operating margin grew 5.9 points year over year to 25.2 percent,
and diluted EPS grew by 128 percent year over year to $0.66.
The company generated $797 million in cash from operations and
returned $279 million to shareholders through stock repurchases and
cash dividends.
Full Year Results
In fiscal 2016, new orders grew 23 percent to $12.42 billion and
net sales increased 12 percent to $10.83 billion. The company
recorded gross margin of 41.7 percent, operating income of $2.15
billion or 19.9 percent of net sales, and diluted EPS of $1.54. On
a non-GAAP adjusted basis, gross margin increased 300 basis points
to 43.2 percent, operating income increased 24 percent to $2.35
billion or 21.7 percent of net sales, and diluted EPS increased 47
percent to $1.75.
The company generated $2.47 billion in cash from operations,
paid dividends of $444 million and used $1.89 billion to repurchase
96 million shares of common stock at an average price of
$19.82.
“In fiscal 2016, we grew orders, revenue, and earnings to the
highest levels in the company’s history, and made significant
progress towards our longer-term strategic and financial goals,”
said Gary Dickerson, President and CEO. “We’ve focused our
organization and investments to deliver highly differentiated
solutions that enable customers to build new devices and structures
that were never possible before.”
“As we look to 2017 and beyond, we see sustainable growth as new
demand drivers layer on top of our traditional end markets in
computing, mobility and consumer electronics,” said Bob Halliday,
Senior Vice President and CFO. “The industries we serve are bigger
and more attractive, our opportunity set is larger, our customer
relationships are stronger, and we’re excited about our new product
pipeline.”
Quarterly Results Summary
|
|
|
|
|
|
|
Change |
|
Q4 FY2016 |
|
Q3 FY2016 |
|
Q4 FY2015 |
|
Q4 FY2016 vs. Q3 FY2016 |
|
Q4 FY2016 vs. Q4 FY2015 |
|
(In millions, except per share amounts and
percentages) |
New orders |
$ |
3,032 |
|
|
$ |
3,658 |
|
|
$ |
2,424 |
|
|
(17 |
%) |
|
25 |
% |
Net sales |
$ |
3,297 |
|
|
$ |
2,821 |
|
|
$ |
2,368 |
|
|
17 |
% |
|
39 |
% |
Gross margin |
42.4 |
% |
|
42.3 |
% |
|
40.5 |
% |
|
0.1 |
points |
|
1.9 |
points |
Operating margin |
23.6 |
% |
|
21.1 |
% |
|
17.9 |
% |
|
2.5 |
points |
|
5.7 |
points |
Net income |
$ |
610 |
|
|
$ |
505 |
|
|
$ |
336 |
|
|
21 |
% |
|
82 |
% |
Diluted earnings per share
(EPS) |
$ |
0.56 |
|
|
$ |
0.46 |
|
|
$ |
0.28 |
|
|
22 |
% |
|
100 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted gross
margin |
43.7 |
% |
|
43.7 |
% |
|
42.2 |
% |
|
— |
points |
|
1.5 |
points |
Non-GAAP adjusted
operating margin |
25.2 |
% |
|
22.8 |
% |
|
19.3 |
% |
|
2.4 |
points |
|
5.9 |
points |
Non-GAAP adjusted net
income |
$ |
722 |
|
|
$ |
550 |
|
|
$ |
347 |
|
|
31 |
% |
|
108 |
% |
Non-GAAP adjusted diluted
EPS |
$ |
0.66 |
|
|
$ |
0.50 |
|
|
$ |
0.29 |
|
|
32 |
% |
|
128 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of the GAAP and non-GAAP adjusted results is
provided in the financial tables included in this release. See also
“Use of Non-GAAP Adjusted Financial Measures” section.
Business Outlook
In the first quarter of fiscal 2017, Applied expects net sales
to be in the range of $3.20 billion to $3.34 billion; the midpoint
of the range would be an increase of approximately 45 percent, year
over year. Non-GAAP adjusted diluted EPS is expected to be in the
range of $0.62 to $0.70; the midpoint of the range would be an
increase of approximately 154 percent, year over year.
This outlook for non-GAAP adjusted diluted EPS excludes known
charges related to completed acquisitions of $0.04 per share, but
does not reflect any items that are unknown at this time, such as
any additional charges related to acquisitions or other
non-operational or unusual items, as well as other tax related
items, which we are not able to predict without unreasonable
efforts due to their inherent uncertainty.
Fourth Quarter and Fiscal Year Reportable Segment
Information
Semiconductor
Systems |
Q4 FY2016 |
|
Q3 FY2016 |
|
Q4 FY2015 |
|
FY2016 |
|
FY2015 |
|
(In millions, except percentages) |
New orders |
$ |
1,833 |
|
|
$ |
2,215 |
|
|
$ |
1,444 |
|
|
$ |
7,289 |
|
|
$ |
6,581 |
|
Foundry |
64 |
% |
|
57 |
% |
|
35 |
% |
|
46 |
% |
|
34 |
% |
DRAM |
10 |
% |
|
14 |
% |
|
21 |
% |
|
16 |
% |
|
25 |
% |
Flash |
16 |
% |
|
15 |
% |
|
31 |
% |
|
26 |
% |
|
28 |
% |
Logic and other |
10 |
% |
|
14 |
% |
|
13 |
% |
|
12 |
% |
|
13 |
% |
Net sales |
2,127 |
|
|
1,786 |
|
|
1,494 |
|
|
6,873 |
|
|
6,135 |
|
Operating income |
667 |
|
|
511 |
|
|
318 |
|
|
1,807 |
|
|
1,410 |
|
Operating margin |
31.4 |
% |
|
28.6 |
% |
|
21.3 |
% |
|
26.3 |
% |
|
23.0 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
Non-GAAP adjusted
operating income |
$ |
713 |
|
|
$ |
556 |
|
|
$ |
365 |
|
|
$ |
1,991 |
|
|
$ |
1,588 |
|
Non-GAAP adjusted
operating margin |
33.5 |
% |
|
31.1 |
% |
|
24.4 |
% |
|
29.0 |
% |
|
25.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applied Global
Services |
Q4 FY2016 |
|
Q3 FY2016 |
|
Q4 FY2015 |
|
FY2016 |
|
FY2015 |
|
(In millions, except percentages) |
New orders |
$ |
794 |
|
|
$ |
590 |
|
|
$ |
743 |
|
|
$ |
2,775 |
|
|
$ |
2,582 |
|
Net sales |
693 |
|
|
657 |
|
|
611 |
|
|
2,589 |
|
|
2,447 |
|
Operating income |
193 |
|
|
175 |
|
|
160 |
|
|
682 |
|
|
630 |
|
Operating margin |
27.8 |
% |
|
26.6 |
% |
|
26.2 |
% |
|
26.3 |
% |
|
25.7 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
Non-GAAP adjusted
operating income |
$ |
193 |
|
|
$ |
176 |
|
|
$ |
159 |
|
|
$ |
683 |
|
|
$ |
633 |
|
Non-GAAP adjusted
operating margin |
27.8 |
% |
|
26.8 |
% |
|
26.0 |
% |
|
26.4 |
% |
|
25.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Display and
Adjacent Markets |
Q4 FY2016 |
|
Q3 FY2016 |
|
Q4 FY2015 |
|
FY2016 |
|
FY2015 |
|
(In millions, except percentages) |
New orders |
$ |
387 |
|
|
$ |
803 |
|
|
$ |
219 |
|
|
$ |
2,160 |
|
|
$ |
828 |
|
Net sales |
452 |
|
|
313 |
|
|
235 |
|
|
1,206 |
|
|
944 |
|
Operating income |
103 |
|
|
63 |
|
|
28 |
|
|
245 |
|
|
191 |
|
Operating margin |
22.8 |
% |
|
20.1 |
% |
|
11.9 |
% |
|
20.3 |
% |
|
20.2 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
Non-GAAP adjusted
operating income |
$ |
103 |
|
|
$ |
63 |
|
|
$ |
28 |
|
|
$ |
245 |
|
|
$ |
194 |
|
Non-GAAP adjusted
operating margin |
22.8 |
% |
|
20.1 |
% |
|
11.9 |
% |
|
20.3 |
% |
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog Information
Applied's backlog decreased 7 percent from the
prior quarter to $4.58 billion and included negative adjustments of
$106 million, primarily due to changes in expected timing of
shipments and other adjustments, partially offset by favorable
foreign currency impacts. Backlog composition by reportable segment
was as follows:
Semiconductor Systems |
45 |
% |
Applied Global
Services |
19 |
% |
Display and Adjacent
Markets |
34 |
% |
Corporate and Other |
2 |
% |
Use of Non-GAAP Adjusted Financial
Measures
Applied provides investors with certain non-GAAP
adjusted financial measures, which are adjusted to exclude the
impact of certain costs, expenses, gains and losses, including
certain items related to mergers and acquisitions; restructuring
charges and any associated adjustments; impairments of assets, or
investments; gain or loss on sale of strategic investments; income
tax items and certain other discrete adjustments. Reconciliations
of these non-GAAP measures to the most directly comparable
financial measures calculated and presented in accordance with GAAP
are provided in the financial tables included in this release.
Management uses these non-GAAP adjusted financial measures to
evaluate the company’s operating and financial performance and for
planning purposes, and as performance measures in its executive
compensation program. Applied believes these measures enhance an
overall understanding of our performance and 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 on a consistent basis by excluding items
that we do not believe are indicative of our ongoing operating
performance. There are limitations in using non-GAAP financial
measures because the non-GAAP financial measures are not prepared
in accordance with generally accepted accounting principles, may be
different from non-GAAP financial measures used by other companies,
and may exclude certain items that may have a material impact upon
our reported financial results. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures 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 those regarding anticipated growth and trends in our
businesses and markets, industry outlooks, technology transitions,
our business and financial performance and market share positions,
our development of new products and technologies, our business
outlook for the first quarter of fiscal 2017, and other statements
that are not historical facts. These statements and their
underlying assumptions are subject to risks and uncertainties and
are not guarantees of future performance. Factors that could cause
actual results to differ materially from those expressed or implied
by such statements include, without limitation: the level of demand
for our products; global economic and industry conditions; consumer
demand for electronic products; the demand for semiconductors;
customers’ technology and capacity requirements; the introduction
of new and innovative technologies, and the timing of technology
transitions; our ability to develop, deliver and support new
products and technologies; the concentrated nature of our customer
base; our ability to expand our current markets, increase market
share and develop new markets; market acceptance of existing and
newly developed products; our ability to obtain and protect
intellectual property rights in key technologies; our ability to
achieve the objectives of operational and strategic initiatives,
align our resources and cost structure with business conditions,
and attract, motivate and retain key employees; the variability of
operating expenses and results among products and segments, and our
ability to accurately forecast future results, market conditions,
customer requirements and business needs; and other risks and
uncertainties described in our SEC filings, including our most
recent Forms 10-Q and 8-K. All forward-looking statements are based
on management’s current estimates, projections and assumptions, and
we assume no obligation to update them.
About Applied Materials
Applied Materials, Inc. (Nasdaq:AMAT) is the leader in materials
engineering solutions used to produce virtually every new chip and
advanced display in the world. Our expertise in modifying materials
at atomic levels and on an industrial scale enables customers to
transform possibilities into reality. At Applied Materials, our
innovations make possible the technology shaping the future. Learn
more at www.appliedmaterials.com.
Contact
Kevin Winston (editorial/media) 408.235.4498Michael Sullivan
(financial community) 408.986.7977
APPLIED MATERIALS, INC.UNAUDITED CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
|
Three Months Ended |
|
Twelve Months Ended |
(In millions, except
per share amounts) |
October 30, 2016 |
|
July 31, 2016 |
|
October 25, 2015 |
|
October 30, 2016 |
|
October 25, 2015 |
Net sales |
$ |
3,297 |
|
|
$ |
2,821 |
|
|
$ |
2,368 |
|
|
$ |
10,825 |
|
|
$ |
9,659 |
|
Cost of products sold |
1,898 |
|
|
1,629 |
|
|
1,409 |
|
|
6,314 |
|
|
5,707 |
|
Gross profit |
1,399 |
|
|
1,192 |
|
|
959 |
|
|
4,511 |
|
|
3,952 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research, development and
engineering |
394 |
|
|
386 |
|
|
363 |
|
|
1,540 |
|
|
1,451 |
|
Marketing and selling |
114 |
|
|
107 |
|
|
96 |
|
|
429 |
|
|
428 |
|
General and administrative |
114 |
|
|
103 |
|
|
77 |
|
|
390 |
|
|
469 |
|
Gain on derivatives associated with
terminated business combination |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(89 |
) |
Total operating
expenses |
622 |
|
|
596 |
|
|
536 |
|
|
2,359 |
|
|
2,259 |
|
Income from
operations |
777 |
|
|
596 |
|
|
423 |
|
|
2,152 |
|
|
1,693 |
|
Interest expense |
38 |
|
|
38 |
|
|
32 |
|
|
155 |
|
|
103 |
|
Interest income and other
income, net |
1 |
|
|
6 |
|
|
6 |
|
|
16 |
|
|
8 |
|
Income before income
taxes |
740 |
|
|
564 |
|
|
397 |
|
|
2,013 |
|
|
1,598 |
|
Provision for income
taxes |
130 |
|
|
59 |
|
|
61 |
|
|
292 |
|
|
221 |
|
Net income |
$ |
610 |
|
|
$ |
505 |
|
|
$ |
336 |
|
|
$ |
1,721 |
|
|
$ |
1,377 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.56 |
|
|
$ |
0.47 |
|
|
$ |
0.28 |
|
|
$ |
1.56 |
|
|
$ |
1.13 |
|
Diluted |
$ |
0.56 |
|
|
$ |
0.46 |
|
|
$ |
0.28 |
|
|
$ |
1.54 |
|
|
$ |
1.12 |
|
Weighted average number of
shares: |
|
|
|
|
|
|
|
|
|
Basic |
1,081 |
|
|
1,083 |
|
|
1,182 |
|
|
1,107 |
|
|
1,214 |
|
Diluted |
1,093 |
|
|
1,093 |
|
|
1,190 |
|
|
1,116 |
|
|
1,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPLIED MATERIALS, INC.UNAUDITED CONSOLIDATED
CONDENSED BALANCE SHEETS
(In millions) |
October 30, 2016 |
|
July 31, 2016 |
|
October 25, 2015 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
3,406 |
|
|
$ |
2,828 |
|
|
$ |
4,797 |
|
Short-term investments |
343 |
|
|
438 |
|
|
168 |
|
Accounts receivable, net |
2,279 |
|
|
1,852 |
|
|
1,739 |
|
Inventories |
2,050 |
|
|
2,026 |
|
|
1,833 |
|
Other current assets |
275 |
|
|
255 |
|
|
724 |
|
Total current assets |
8,353 |
|
|
7,399 |
|
|
9,261 |
|
Long-term investments |
929 |
|
|
960 |
|
|
946 |
|
Property, plant and
equipment, net |
937 |
|
|
905 |
|
|
892 |
|
Goodwill |
3,316 |
|
|
3,305 |
|
|
3,302 |
|
Purchased technology and
other intangible assets, net |
575 |
|
|
621 |
|
|
762 |
|
Deferred income taxes and
other assets |
478 |
|
|
509 |
|
|
145 |
|
Total assets |
$ |
14,588 |
|
|
$ |
13,699 |
|
|
$ |
15,308 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Short-term debt |
$ |
200 |
|
|
$ |
— |
|
|
$ |
1,200 |
|
Accounts payable and accrued
expenses |
2,056 |
|
|
1,800 |
|
|
1,833 |
|
Customer deposits and deferred
revenue |
1,376 |
|
|
1,164 |
|
|
765 |
|
Total current
liabilities |
3,632 |
|
|
2,964 |
|
|
3,798 |
|
Long-term debt |
3,143 |
|
|
3,343 |
|
|
3,342 |
|
Other liabilities |
596 |
|
|
573 |
|
|
555 |
|
Total liabilities |
7,371 |
|
|
6,880 |
|
|
7,695 |
|
Total stockholders’
equity |
7,217 |
|
|
6,819 |
|
|
7,613 |
|
Total liabilities and
stockholders’ equity |
$ |
14,588 |
|
|
$ |
13,699 |
|
|
$ |
15,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
APPLIED MATERIALS, INC.UNAUDITED CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
(In
millions) |
Three Months Ended |
|
Twelve Months Ended |
October 30, 2016 |
|
July 31, 2016 |
|
October 25, 2015 |
October 30, 2016 |
|
October 25, 2015 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
|
Net income |
$ |
610 |
|
|
$ |
505 |
|
|
$ |
336 |
|
|
$ |
1,721 |
|
|
$ |
1,377 |
|
Adjustments required to reconcile
net income to cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
100 |
|
|
97 |
|
|
96 |
|
|
389 |
|
|
371 |
|
Share-based compensation |
51 |
|
|
48 |
|
|
46 |
|
|
201 |
|
|
187 |
|
Excess tax benefits from
share-based compensation |
(5 |
) |
|
(5 |
) |
|
(2 |
) |
|
(23 |
) |
|
(56 |
) |
Deferred income taxes |
7 |
|
|
21 |
|
|
(159 |
) |
|
21 |
|
|
(134 |
) |
Other |
18 |
|
|
5 |
|
|
(11 |
) |
|
38 |
|
|
53 |
|
Net change in operating assets and
liabilities |
16 |
|
|
310 |
|
|
165 |
|
|
119 |
|
|
(635 |
) |
Cash provided by operating
activities |
797 |
|
|
981 |
|
|
471 |
|
|
2,466 |
|
|
1,163 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
Capital expenditures |
(88 |
) |
|
(50 |
) |
|
(53 |
) |
|
(253 |
) |
|
(215 |
) |
Cash paid for acquisitions, net of
cash acquired |
(11 |
) |
|
3 |
|
|
(2 |
) |
|
(16 |
) |
|
(4 |
) |
Proceeds from sales and maturities
of investments |
553 |
|
|
208 |
|
|
200 |
|
|
1,234 |
|
|
1,100 |
|
Purchases of investments |
(443 |
) |
|
(483 |
) |
|
(202 |
) |
|
(1,390 |
) |
|
(1,162 |
) |
Cash provided by (used in)
investing activities |
11 |
|
|
(322 |
) |
|
(57 |
) |
|
(425 |
) |
|
(281 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
Debt borrowings (repayments), net
of issuance costs |
— |
|
|
(2 |
) |
|
2,581 |
|
|
(1,207 |
) |
|
2,581 |
|
Proceeds from common stock
issuances and others |
44 |
|
|
— |
|
|
45 |
|
|
88 |
|
|
88 |
|
Common stock repurchases |
(171 |
) |
|
(196 |
) |
|
(700 |
) |
|
(1,892 |
) |
|
(1,325 |
) |
Excess tax benefits from
share-based compensation |
5 |
|
|
5 |
|
|
2 |
|
|
23 |
|
|
56 |
|
Payments of dividends to
stockholders |
(108 |
) |
|
(108 |
) |
|
(119 |
) |
|
(444 |
) |
|
(487 |
) |
Cash provided by (used in)
financing activities |
(230 |
) |
|
(301 |
) |
|
1,809 |
|
|
(3,432 |
) |
|
913 |
|
Increase (decrease) in
cash and cash equivalents |
578 |
|
|
358 |
|
|
2,223 |
|
|
(1,391 |
) |
|
1,795 |
|
Cash and cash
equivalents — beginning of period |
2,828 |
|
|
2,470 |
|
|
2,574 |
|
|
4,797 |
|
|
3,002 |
|
Cash and cash
equivalents — end of period |
$ |
3,406 |
|
|
$ |
2,828 |
|
|
$ |
4,797 |
|
|
$ |
3,406 |
|
|
$ |
4,797 |
|
Supplemental cash flow
information: |
|
|
|
|
|
|
|
|
|
Cash payments for income taxes |
$ |
13 |
|
|
$ |
49 |
|
|
$ |
149 |
|
|
$ |
157 |
|
|
$ |
407 |
|
Cash refunds from income taxes |
$ |
9 |
|
|
$ |
1 |
|
|
$ |
2 |
|
|
$ |
113 |
|
|
$ |
12 |
|
Cash payments for interest |
$ |
41 |
|
|
$ |
34 |
|
|
$ |
7 |
|
|
$ |
151 |
|
|
$ |
92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPLIED MATERIALS, INC.UNAUDITED SUPPLEMENTAL
INFORMATION
Corporate and Other
(In millions) |
Q4 FY2016 |
|
Q3 FY2016 |
|
Q4 FY2015 |
|
FY 2016 |
|
FY 2015 |
New orders |
$ |
18 |
|
|
$ |
50 |
|
|
$ |
18 |
|
|
$ |
192 |
|
|
$ |
113 |
|
|
|
|
|
|
|
|
|
|
|
Unallocated net sales |
$ |
25 |
|
|
$ |
65 |
|
|
$ |
28 |
|
|
$ |
157 |
|
|
$ |
133 |
|
Unallocated cost of
products sold and expenses |
(160 |
) |
|
(170 |
) |
|
(65 |
) |
|
(538 |
) |
|
(523 |
) |
Share-based
compensation |
(51 |
) |
|
(48 |
) |
|
(46 |
) |
|
(201 |
) |
|
(187 |
) |
Certain items
associated with terminated business combination |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(50 |
) |
Gain on derivatives
associated with terminated business combination, net |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
89 |
|
Total |
$ |
(186 |
) |
|
$ |
(153 |
) |
|
$ |
(83 |
) |
|
$ |
(582 |
) |
|
$ |
(538 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Information
|
Q4 FY2016 |
|
Q3 FY2016 |
|
Q4 FY2015 |
New Orders and Net Sales
by Geography |
|
|
|
|
|
|
|
|
|
|
|
(In $ millions) |
NewOrders |
|
NetSales |
|
NewOrders |
|
NetSales |
|
NewOrders |
|
NetSales |
United States |
221 |
|
|
289 |
|
|
259 |
|
|
289 |
|
|
282 |
|
|
301 |
|
% of Total |
7 |
% |
|
9 |
% |
|
7 |
% |
|
10 |
% |
|
12 |
% |
|
13 |
% |
Europe |
212 |
|
|
256 |
|
|
212 |
|
|
124 |
|
|
155 |
|
|
172 |
|
% of Total |
7 |
% |
|
8 |
% |
|
6 |
% |
|
5 |
% |
|
6 |
% |
|
7 |
% |
Japan |
262 |
|
|
364 |
|
|
270 |
|
|
321 |
|
|
452 |
|
|
278 |
|
% of Total |
9 |
% |
|
11 |
% |
|
7 |
% |
|
11 |
% |
|
19 |
% |
|
12 |
% |
Korea |
432 |
|
|
632 |
|
|
689 |
|
|
472 |
|
|
207 |
|
|
239 |
|
% of Total |
14 |
% |
|
19 |
% |
|
19 |
% |
|
17 |
% |
|
8 |
% |
|
10 |
% |
Taiwan |
1,170 |
|
|
1,154 |
|
|
1,240 |
|
|
741 |
|
|
846 |
|
|
758 |
|
% of Total |
39 |
% |
|
35 |
% |
|
34 |
% |
|
26 |
% |
|
35 |
% |
|
32 |
% |
Southeast Asia |
84 |
|
|
161 |
|
|
139 |
|
|
303 |
|
|
100 |
|
|
143 |
|
% of Total |
3 |
% |
|
5 |
% |
|
4 |
% |
|
11 |
% |
|
4 |
% |
|
6 |
% |
China |
651 |
|
|
441 |
|
|
849 |
|
|
571 |
|
|
382 |
|
|
477 |
|
% of Total |
21 |
% |
|
13 |
% |
|
23 |
% |
|
20 |
% |
|
16 |
% |
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Employees (In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Regular Full Time |
15.6 |
|
|
15.2 |
|
|
14.6 |
|
|
|
|
|
|
|
|
|
|
|
|
FY 2016 |
|
FY 2015 |
New Orders and Net Sales
by Geography |
|
|
|
|
|
|
|
|
(In $ millions) |
|
NewOrders |
|
NetSales |
|
NewOrders |
|
NetSales |
United States |
|
1,235 |
|
|
1,143 |
|
|
1,323 |
|
|
1,630 |
|
% of Total |
|
10 |
% |
|
11 |
% |
|
13 |
% |
|
17 |
% |
Europe |
|
774 |
|
|
615 |
|
|
576 |
|
|
642 |
|
% of Total |
|
6 |
% |
|
6 |
% |
|
6 |
% |
|
7 |
% |
Japan |
|
980 |
|
|
1,279 |
|
|
1,786 |
|
|
1,078 |
|
% of Total |
|
8 |
% |
|
12 |
% |
|
18 |
% |
|
11 |
% |
Korea |
|
2,286 |
|
|
1,883 |
|
|
1,709 |
|
|
1,654 |
|
% of Total |
|
19 |
% |
|
17 |
% |
|
17 |
% |
|
17 |
% |
Taiwan |
|
3,389 |
|
|
2,843 |
|
|
2,808 |
|
|
2,600 |
|
% of Total |
|
27 |
% |
|
26 |
% |
|
28 |
% |
|
27 |
% |
Southeast Asia |
|
847 |
|
|
803 |
|
|
430 |
|
|
432 |
|
% of Total |
|
7 |
% |
|
7 |
% |
|
4 |
% |
|
4 |
% |
China |
|
2,905 |
|
|
2,259 |
|
|
1,472 |
|
|
1,623 |
|
% of Total |
|
23 |
% |
|
21 |
% |
|
14 |
% |
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
APPLIED MATERIALS, INC.UNAUDITED RECONCILIATION
OF GAAP TO NON-GAAP ADJUSTED RESULTS
|
Three Months Ended |
|
Twelve Months Ended |
(In millions, except
percentages) |
October 30, 2016 |
|
July 31, 2016 |
|
October 25, 2015 |
|
October 30, 2016 |
|
October 25, 2015 |
Non-GAAP Adjusted Gross
Profit |
|
|
|
|
|
|
|
|
|
Reported gross profit -
GAAP basis |
$ |
1,399 |
|
|
$ |
1,192 |
|
|
$ |
959 |
|
|
$ |
4,511 |
|
|
$ |
3,952 |
|
Certain items associated
with acquisitions1 |
42 |
|
|
42 |
|
|
42 |
|
|
167 |
|
|
162 |
|
Inventory charges
(reversals) related to restructuring3, 4 |
— |
|
|
(1 |
) |
|
1 |
|
|
(2 |
) |
|
35 |
|
Other significant gains,
losses or charges, net6 |
— |
|
|
— |
|
|
(2 |
) |
|
— |
|
|
(2 |
) |
Non-GAAP adjusted gross
profit |
$ |
1,441 |
|
|
$ |
1,233 |
|
|
$ |
1,000 |
|
|
$ |
4,676 |
|
|
$ |
4,147 |
|
Non-GAAP adjusted gross
margin |
43.7 |
% |
|
43.7 |
% |
|
42.2 |
% |
|
43.2 |
% |
|
42.9 |
% |
Non-GAAP Adjusted
Operating Income |
|
|
|
|
|
|
|
|
|
Reported operating income
- GAAP basis |
$ |
777 |
|
|
$ |
596 |
|
|
$ |
423 |
|
|
$ |
2,152 |
|
|
$ |
1,693 |
|
Certain items associated
with acquisitions1 |
47 |
|
|
47 |
|
|
47 |
|
|
188 |
|
|
185 |
|
Acquisition integration
and deal costs |
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|
2 |
|
Gain on derivatives
associated with terminated business combination, net |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(89 |
) |
Certain items associated
with terminated business combination2 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
50 |
|
Inventory charges
(reversals) related to restructuring and asset impairments, net3,
4 |
— |
|
|
(1 |
) |
|
(1 |
) |
|
(3 |
) |
|
49 |
|
Other significant gains,
losses or charges, net5, 6 |
8 |
|
|
— |
|
|
(13 |
) |
|
8 |
|
|
6 |
|
Non-GAAP adjusted
operating income |
$ |
832 |
|
|
$ |
644 |
|
|
$ |
456 |
|
|
$ |
2,347 |
|
|
$ |
1,896 |
|
Non-GAAP adjusted
operating margin |
25.2 |
% |
|
22.8 |
% |
|
19.3 |
% |
|
21.7 |
% |
|
19.6 |
% |
Non-GAAP Adjusted Net
Income |
|
|
|
|
|
|
|
|
|
Reported net income - GAAP
basis7 |
$ |
610 |
|
|
$ |
505 |
|
|
$ |
336 |
|
|
$ |
1,721 |
|
|
$ |
1,377 |
|
Certain items associated
with acquisitions1 |
47 |
|
|
47 |
|
|
47 |
|
|
188 |
|
|
185 |
|
Acquisition integration
and deal costs |
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|
2 |
|
Gain on derivatives
associated with terminated business combination, net |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(89 |
) |
Certain items associated
with terminated business combination2 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
50 |
|
Inventory charges
(reversals) related to restructuring and asset impairments, net3,
4 |
— |
|
|
(1 |
) |
|
(1 |
) |
|
(3 |
) |
|
49 |
|
Impairment (gain on sale)
of strategic investments, net |
6 |
|
|
— |
|
|
(2 |
) |
|
3 |
|
|
4 |
|
Loss on early
extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
5 |
|
|
— |
|
Other significant gains,
losses or charges, net5, 6 |
8 |
|
|
— |
|
|
(13 |
) |
|
8 |
|
|
6 |
|
Reinstatement of federal
R&D tax credit, resolution of prior years’ income tax filings
and other tax items7 |
57 |
|
|
1 |
|
|
(18 |
) |
|
45 |
|
|
(110 |
) |
Income tax effect of
non-GAAP adjustments8 |
(6 |
) |
|
(4 |
) |
|
(2 |
) |
|
(19 |
) |
|
(17 |
) |
Non-GAAP adjusted net
income |
$ |
722 |
|
|
$ |
550 |
|
|
$ |
347 |
|
|
$ |
1,950 |
|
|
$ |
1,457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
These
items are incremental charges attributable to completed
acquisitions, consisting of amortization of purchased intangible
assets. |
|
|
2 |
These
items are incremental charges related to the terminated business
combination agreement with Tokyo Electron Limited, consisting of
acquisition-related and integration planning costs. |
|
|
3 |
Results
for the three months ended July 31, 2016 and twelve months ended
October 30, 2016 primarily included benefit from sales of solar
equipment tools for which inventory had been previously reserved
related to the cost reductions in the solar business. |
|
|
4 |
Results
for the three months ended October 25, 2015 included a $2 million
favorable adjustment of restructuring reserves related to prior
restructuring plans and $1 million of inventory charges related to
cost reductions in the solar business. Results for fiscal 2015
primarily included $35 million of inventory charges and $17 million
of restructuring charges and asset impairments related to cost
reductions in the solar business, and a $2 million favorable
adjustment of restructuring reserves related to prior restructuring
plans. |
|
|
5 |
Results
for the three and twelve months ended October 30, 2016 included a
loss of $8 million due to discontinuance of cash flow hedges that
were probable not to occur by the end of the originally specified
time period. |
|
|
6 |
Results for the three and twelve months ended October 25, 2015
included immaterial correction of errors related to prior periods,
partially offset by costs related to executive termination. |
|
|
7 |
Amounts for fiscal 2016 and 2015 included resolution of prior
years' income tax filings and other tax items. Amounts for fiscal
2015 included an adjustment to decrease the provision for income
taxes by $28 million with a corresponding increase in net income,
resulting in an increase in diluted earnings per share of $0.02.
The adjustment was excluded in Applied's non-GAAP adjusted results
and was made primarily to correct an error in the recognition of
cost of sales in the U.S. related to intercompany sales, which
resulted in overstating profitability in the U.S. and the provision
for income taxes in immaterial amounts in each year since fiscal
2010. |
|
|
8 |
These
amounts represent non-GAAP adjustments above multiplied by the
effective tax rate within the jurisdictions the adjustments
affect. |
APPLIED MATERIALS, INC.UNAUDITED RECONCILIATION
OF GAAP TO NON-GAAP ADJUSTED RESULTS
|
Three Months Ended |
|
Twelve Months Ended |
(In millions, except
per share amounts) |
October 30, 2016 |
|
July 31, 2016 |
|
October 25, 2015 |
|
October 30, 2016 |
|
October 25, 2015 |
Non-GAAP Adjusted Earnings
Per Diluted Share |
|
|
|
|
|
|
|
|
|
Reported earnings per
diluted share - GAAP basis1 |
$ |
0.56 |
|
|
$ |
0.46 |
|
|
$ |
0.28 |
|
|
$ |
1.54 |
|
|
$ |
1.12 |
|
Certain items associated
with acquisitions |
0.04 |
|
|
0.04 |
|
|
0.04 |
|
|
0.16 |
|
|
0.14 |
|
Certain items associated
with terminated business combination |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.03 |
|
Gain on derivatives
associated with terminated business combination, net |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.05 |
) |
Restructuring, inventory
charges and asset impairments |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.03 |
|
Other significant gains,
losses or charges, net |
0.01 |
|
|
— |
|
|
(0.01 |
) |
|
0.01 |
|
|
0.01 |
|
Reinstatement of federal
R&D tax credit, resolution of prior years’ income tax filings
and other tax items1 |
0.05 |
|
|
— |
|
|
(0.02 |
) |
|
0.04 |
|
|
(0.09 |
) |
Non-GAAP adjusted earnings
per diluted share |
$ |
0.66 |
|
|
$ |
0.50 |
|
|
$ |
0.29 |
|
|
$ |
1.75 |
|
|
$ |
1.19 |
|
Weighted average number of
diluted shares |
1,093 |
|
|
1,093 |
|
|
1,190 |
|
|
1,116 |
|
|
1,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Amounts for fiscal 2016
and 2015 included resolution of prior years' income tax filings and
other tax items. Amounts for fiscal 2015 included an adjustment to
decrease the provision for income taxes by $28 million with a
corresponding increase in net income, resulting in an increase in
diluted earnings per share of $0.02. The adjustment was excluded in
Applied's non-GAAP adjusted results and was made primarily to
correct an error in the recognition of cost of sales in the U.S.
related to intercompany sales, which resulted in overstating
profitability in the U.S. and the provision for income taxes in
immaterial amounts in each year since fiscal 2010. |
APPLIED MATERIALS, INC.UNAUDITED RECONCILIATION
OF GAAP TO NON-GAAP ADJUSTED RESULTS
|
Three Months Ended |
|
Twelve Months Ended |
(In millions, except
percentages) |
October 30, 2016 |
|
July 31, 2016 |
|
October 25, 2015 |
|
October 30, 2016 |
|
October 25, 2015 |
Semiconductor Systems
Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
Reported operating income
- GAAP basis |
$ |
667 |
|
|
$ |
511 |
|
|
$ |
318 |
|
|
$ |
1,807 |
|
|
$ |
1,410 |
|
Certain items associated
with acquisitions1 |
46 |
|
|
45 |
|
|
47 |
|
|
184 |
|
|
178 |
|
Non-GAAP adjusted
operating income |
$ |
713 |
|
|
$ |
556 |
|
|
$ |
365 |
|
|
$ |
1,991 |
|
|
$ |
1,588 |
|
Non-GAAP adjusted
operating margin |
33.5 |
% |
|
31.1 |
% |
|
24.4 |
% |
|
29.0 |
% |
|
25.9 |
% |
AGS Non-GAAP Adjusted
Operating Income |
|
|
|
|
|
|
|
|
|
Reported operating income
- GAAP basis |
$ |
193 |
|
|
$ |
175 |
|
|
$ |
160 |
|
|
$ |
682 |
|
|
$ |
630 |
|
Certain items associated
with acquisitions1 |
— |
|
|
1 |
|
|
— |
|
|
1 |
|
|
1 |
|
Inventory charges related
to restructuring2 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3 |
|
Other significant gains,
losses or charges, net3 |
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
Non-GAAP adjusted
operating income |
$ |
193 |
|
|
$ |
176 |
|
|
$ |
159 |
|
|
$ |
683 |
|
|
$ |
633 |
|
Non-GAAP adjusted
operating margin |
27.8 |
% |
|
26.8 |
% |
|
26.0 |
% |
|
26.4 |
% |
|
25.9 |
% |
Display and Adjacent
Markets Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
Reported operating income
- GAAP basis |
$ |
103 |
|
|
$ |
63 |
|
|
$ |
28 |
|
|
$ |
245 |
|
|
$ |
191 |
|
Certain items
associated with acquisitions1 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3 |
|
Non-GAAP adjusted
operating income |
$ |
103 |
|
|
$ |
63 |
|
|
$ |
28 |
|
|
$ |
245 |
|
|
$ |
194 |
|
Non-GAAP adjusted
operating margin |
22.8 |
% |
|
20.1 |
% |
|
11.9 |
% |
|
20.3 |
% |
|
20.6 |
% |
1 |
These
items are incremental charges attributable to completed
acquisitions, consisting of amortization of purchased intangible
assets. |
|
|
2 |
Results for the twelve months ended October 30, 2015 included $3
million of inventory charges related to cost reduction in the solar
business. |
|
|
3 |
Results for the three and twelve months ended October 25, 2015
included immaterial correction of errors related to prior periods,
partially offset by costs related to executive termination. |
Note: The reconciliation of GAAP and non-GAAP
adjusted segment results above does not include certain revenues,
costs of products sold and operating expenses that are reported
within corporate and other and included in consolidated operating
income.
APPLIED MATERIALS, INC.UNAUDITED RECONCILIATION
OF GAAP TO NON-GAAP ADJUSTED OPERATING EXPENSES
|
Three Months Ended |
(In millions) |
October 30, 2016 |
|
July 31, 2016 |
Operating expenses - GAAP
basis |
$ |
622 |
|
|
$ |
596 |
|
Certain items associated
with acquisitions |
(5 |
) |
|
(5 |
) |
Acquisition integration
and deal costs |
— |
|
|
(2 |
) |
Other significant
gains, losses or charges, net |
(8 |
) |
|
— |
|
Non-GAAP adjusted
operating expenses |
$ |
609 |
|
|
$ |
589 |
|
|
|
|
|
|
|
|
|
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP
ADJUSTED EFFECTIVE INCOME TAX RATE
|
Three Months Ended |
(In millions, except
percentages) |
October 30, 2016 |
Provision for income taxes
- GAAP basis (a) |
$ |
130 |
|
Reinstatement of federal
R&D tax credit, resolutions of prior years’ income tax filings
and other tax items |
(57 |
) |
Income tax effect of
non-GAAP adjustments |
6 |
|
Non-GAAP adjusted
provision for income taxes (b) |
$ |
79 |
|
|
|
Income before income taxes
- GAAP basis (c) |
$ |
740 |
|
Certain items associated
with acquisitions |
47 |
|
Impairment of strategic
investments, net |
6 |
|
Other significant
gains, losses or charges, net |
8 |
|
Non-GAAP adjusted income
before income taxes (d) |
$ |
801 |
|
|
|
Effective income tax rate
- GAAP basis (a/c) |
17.6 |
% |
|
|
Non-GAAP adjusted
effective income tax rate (b/d) |
9.9 |
% |
|
|
|
Applied Materials (NASDAQ:AMAT)
Historical Stock Chart
From Apr 2024 to May 2024
Applied Materials (NASDAQ:AMAT)
Historical Stock Chart
From May 2023 to May 2024