Stats Say Applied Materials Will Report Zero Earnings Growth

Shares of Applied Materials, Inc. AMAT are marginally up on Thursday as the company prepares to announce its second quarter financial results after the market closes.

The company guided earnings of $0.28 per share, which imply zero year-over-year growth, and a very small quarter-over-quarter increase.

The Street anticipates earnings in line with guidance of $0.28 per share, and revenue of $2.397 billion. For its part, the crowd is slightly more bullish, and expects earnings of $0.31 per share on revenue of $2.433 billion.

As it can be appreciated in the chart above, Applied Materials has a history of either meeting or beating its guidance, having done so for the past eight quarters, and having missed the Street’s estimate just once. Results have, however, come short of the crowd’s expectations in several occasions.

A second chart illustrates the evolution of sentiment over time. As it can be seen, the Street’s consensus experienced a steep fall in February, and has remained at those levels ever since. On the other hand, the crowd has become increasingly bearish. However, having started at the same point as Wall Street, Main Street’s expectations did not drop as much.

Another Growth Year For Semiconductors?

In a report published last Thursday, analysts at JP Morgan forecast another year of growth for Semiconductors stocks in 2016. They see technology transitions in memory and 10nm FF driving the industry momentum.

According to a recent Benzinga article, “The analysts believe that 2016 will be another growth year. Their bottom up analysis points to about $35B in spending, representing 4.5 percent y/y growth, based on technology transitions by memory customers. The technology transitions include continued 3D NAND ramps, additional 20nm conversions and initial 1Xnm DRAM deployments.”

The firm maintained an Overweight rating on Applied Materials, as well as on KLA-Tencor Corp and Lam Research Corporation.