Applied Materials Announces Full Fiscal Year Results (posted 11/26/08)
Applied Materials, Inc. recently reported results for its fiscal year and fourth quarter ended October 26, 2008. Fourth quarter net sales were $2.04 billion, down from $2.37 billion for the fourth quarter of fiscal 2007, and up from $1.85 billion for the third quarter of fiscal 2008. Gross margin was 39.1%, down from 45.5% for the fourth quarter of fiscal 2007, and down from 40.2% for the third quarter of fiscal 2008. GAAP net income was $231 million, or $0.17 per diluted share, down from net income of $422 million, or $0.30 per diluted share, for the fourth quarter of fiscal 2007, and up from $165 million, or $0.12 per diluted share, for the third quarter of fiscal 2008.
New orders of $2.21 billion for the fourth quarter of fiscal 2008 were comparable to the fourth quarter of fiscal 2007, and increased from $2.03 billion for the third quarter of fiscal 2008. Regional distribution of new orders for the fourth quarter of fiscal 2008 was: Taiwan, 26%; North America, 22%; Southeast Asia and China, 22%; Europe, 11%; Korea, 10%; and Japan, 9%. Backlog at the end of the fourth quarter of fiscal 2008 was $4.85 billion, up from $4.74 billion at the end of the third quarter of fiscal 2008 and up from $3.65 billion at the end of fiscal 2007.
Fiscal 2008 net sales were $8.13 billion, down from $9.73 billion for fiscal 2007. Gross margin for fiscal 2008 was 42.4%, down from 46.1% for fiscal 2007. GAAP net income for fiscal 2008 was $961 million, or $0.70 per diluted share, down from net income of $1.71 billion, or $1.20 per diluted share, for fiscal 2007. New orders of $9.16 billion for fiscal 2008 decreased from $9.68 billion for fiscal 2007.
“Fiscal 2008 was a pivotal year for Applied as we made significant progress in advancing our Silicon and Display businesses and expanding in the solar market. Our fourth quarter results demonstrate effective performance in a very challenging environment,” said Mike Splinter, president and chief executive officer. “We passed a major milestone as the first SunFab™ thin film solar line began volume production, demonstrating Applied’s commitment to deliver exciting new technology to the solar industry. As Applied moves into fiscal 2009, we will implement further cost-reduction actions due to declining market conditions, and we will invest in strategic priorities.”
Applied will implement a restructuring program beginning in the first quarter of fiscal 2009 designed to streamline the organization and reduce operating costs. When completed, the program is expected to drive annualized cost savings of approximately $400 million. As part of this program, the company plans to reduce its global workforce by approximately 12% (1800 positions) by the end of fiscal 2009 through a combination of attrition, voluntary separation, and other workforce reduction programs consistent with local legal requirements and in consultation with employee representatives, where applicable.
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