Applied Materials, Inc. (AMAT) has reported an 145.80 percent jump in profit for the quarter ended Jan. 29, 2017. The company has earned $703 million, or $0.65 a share in the quarter, compared with $286 million, or $0.25 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $732 million, or $0.67 a share compared with $302 million or $0.26 a share, a year ago.
Revenue during the quarter surged 45.24 percent to $3,278 million from $2,257 million in the previous year period. Gross margin for the quarter expanded 350 basis points over the previous year period to 44.08 percent. Total expenses were 75.38 percent of quarterly revenues, down from 84.32 percent for the same period last year. This has led to an improvement of 893 basis points in operating margin to 24.62 percent.
Operating income for the quarter was $807 million, compared with $354 million in the previous year period.
However, the adjusted operating income for the quarter stood at $852 million compared to $401 million in the prior year period. At the same time, adjusted operating margin improved 822 basis points in the quarter to 25.99 percent from 17.77 percent in the last year period.
"We set new records for earnings and orders in our first quarter, and 2017 is shaping up to be an outstanding year for Applied Materials," said Gary Dickerson, president and chief executive officer. "Our inflection-focused innovation strategy is delivering results and we are increasingly confident that we can maintain our trajectory of sustainable growth and raise the ceiling on our performance."
For the second-quarter 2017, Applied Materials, Inc. forecasts revenue to be in the range of $3,450 million to $3,600 million. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.72 to $0.80.
Operating cash flow improves significantly
Applied Materials, Inc. has generated cash of $646 million from operating activities during the quarter, up 212.08 percent or $439 million, when compared with the last year period.
The company has spent $367 million cash to meet investing activities during the quarter as against cash outgo of $109 million in the last year period.
The company has spent $194 million cash to carry out financing activities during the quarter as against cash outgo of $1,933 million in the last year period.
Cash and cash equivalents stood at $3,491 million as on Jan. 29, 2017, up 17.86 percent or $529 million from $2,962 million on Jan. 31, 2016.
Working capital increases
Applied Materials, Inc. has recorded an increase in the working capital over the last year. It stood at $5,286 million as at Jan. 29, 2017, up 14.84 percent or $683 million from $4,603 million on Jan. 31, 2016. Current ratio was at 2.39 as on Jan. 29, 2017, down from 3 on Jan. 31, 2016.
Days sales outstanding went down to 57 days for the quarter compared with 73 days for the same period last year.
Days inventory outstanding has decreased to 57 days for the quarter compared with 134 days for the previous year period.
Debt comes down
Applied Materials, Inc. has recorded a decline in total debt over the last one year. It stood at $3,125 million as on Jan. 29, 2017, down 6.52 percent or $218 million from $3,343 million on Jan. 31, 2016. Applied Materials, Inc. has recorded a decline in long-term debt over the last one year. It stood at $3,125 million as on Jan. 29, 2017, down 6.52 percent or $218 million from $3,343 million on Jan. 31, 2016. Total debt was 20.50 percent of total assets as on Jan. 29, 2017, compared with 25.09 percent on Jan. 31, 2016. Debt to equity ratio was at 0.41 as on Jan. 29, 2017, down from 0.47 as on Jan. 31, 2016. Interest coverage ratio improved to 21.24 for the quarter from 8.43 for the same period last year.
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