Chip-equipment maker Applied Materials has surprised most of the cocaine nose jobs of Wall Street with a better-than-expected third-quarter profit. It appears that contract manufacturers are spending more on technology used to make smartphone and memory chips.
The company also forecast current-quarter adjusted profit largely above analysts' average estimate. Chief Executive Gary Dickerson said that demand for DRAM chips is expected to grow in the current quarter.
Applied Materials, which also provides equipment to make flat panel displays and solar cells, forecast an adjusted profit of 25-29 cents per share for the fourth quarter. Wall Street was expecting a profit of 26 cents per share.
Applied Materials expects revenue growth of about 10 to 17 percent, implying revenue of $2.19 billion to $2.33 billion for the quarter. Analysts on average were expecting $2.28 billion. Applied Materials' net income rose to $301 millionin the third quarter ended July 27, from $168 milliona year earlier. Revenue rose 14.7 percent to $2.27 billion.
Revenue in the company's silicon systems business, which brings in about two-thirds of total sales, rose 16 percent to $1.48 billion.