Applied Materials (NASDAQ:AMAT) is scheduled to report second-quarter earnings on Thursday, May 16th, after market close.
Analysts expect a year-over-year decline in both the top and bottom lines, with earnings per share of $1.99 on revenues of $6.54 billion.
The semiconductor equipment maker is expected to beat market expectations for the second-quarter, helped by strong China and DRAM sales.
Despite the company’s warning that China’s share of revenue would dip from 45% to 30% through the year, analysts believe that China spending is tracking better and even moderately higher year-over-year.
“While AMAT is most at risk to slowing Western trailing-edge demand in the 2H (as nearly every trailing edge spender outside of Texas and China has cut spending materially), we see limited impact were China and DRAM to remain at current levels,” said analysts at Morgan Stanley.
In late February, Applied Materials (AMAT) disclosed it had received multiple subpoenas from U.S. government authorities seeking information pertaining to its China shipments.
Over the last three months, the company’s earnings per share estimates have been revised upwards 23 times, while its revenue estimates have seen 18 upward revisions vs. four downgrades.
Seeking Alpha analysts at large consider AMAT a Buy. This compares with average Wall Street rating of Buy and SA Quant rating of Hold.