Applied Materials, Inc (AMAT) has reported an 81.55 percent jump in profit for the quarter ended Oct. 30, 2016. The company has earned $610 million, or $0.56 a share in the quarter, compared with $336 million, or $0.28 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $722 million, or $0.66 a share compared with $347 million or $0.29 a share, a year ago. Revenue during the quarter surged 39.23 percent to $3,297 million from $2,368 million in the previous year period. Gross margin for the quarter expanded 193 basis points over the previous year period to 42.43 percent. Total expenses were 76.43 percent of quarterly revenues, down from 82.14 percent for the same period last year. This has led to an improvement of 570 basis points in operating margin to 23.57 percent.
Operating income for the quarter was $777 million, compared with $423 million in the previous year period.
However, the adjusted operating income for the quarter stood at $832 million compared to $456 million in the prior year period. At the same time, adjusted operating margin improved 598 basis points in the quarter to 25.24 percent from 19.26 percent in the last year period.
"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 chief executive officer. "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."
For the first-quarter 2017, Applied Materials, Inc forecasts revenue to be in the range of $3,200 million to $3,340 million. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.62 to $0.70.
Operating cash flow improves significantly
Applied Materials, Inc has generated cash of $2,466 million from operating activities during the year, up 112.04 percent or $1,303 million, when compared with the last year. The company has spent $425 million cash to meet investing activities during the year as against cash outgo of $281 million in the last year.
The company has spent $3,432 million cash to carry out financing activities during the year as against cash inflow of $913 million in the last year period.
Cash and cash equivalents stood at $3,406 million as on Oct. 30, 2016, down 29 percent or $1,391 million from $4,797 million on Oct. 25, 2015.
Working capital declines
Applied Materials, Inc has witnessed a decline in the working capital over the last year. It stood at $4,721 million as at Oct. 30, 2016, down 13.58 percent or $742 million from $5,463 million on Oct. 25, 2015. Current ratio was at 2.30 as on Oct. 30, 2016, down from 2.44 on Oct. 25, 2015.
Debt comes down significantly
Applied Materials, Inc has recorded a decline in total debt over the last one year. It stood at $3,343 million as on Oct. 30, 2016, down 26.40 percent or $1,199 million from $4,542 million on Oct. 25, 2015. Total debt was 22.92 percent of total assets as on Oct. 30, 2016, compared with 29.67 percent on Oct. 25, 2015. Debt to equity ratio was at 0.46 as on Oct. 30, 2016, down from 0.60 as on Oct. 25, 2015. Interest coverage ratio improved to 20.45 for the quarter from 13.22 for the same period last year.
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