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Applied Materials Announces First Quarter 2022 Results
来源: Nasdaq GlobeNewswire / 16 2月 2022 15:01:00 America/Chicago
- Record quarterly revenue of $6.27 billion, up 21 percent year over year
- GAAP operating margin of 31.5 percent and non-GAAP operating margin of 31.7 percent, up 6.6 points and 2.7 points year over year, respectively
- GAAP EPS of $2.00 and non-GAAP EPS of $1.89, up 64 percent and 36 percent year over year, respectively
SANTA CLARA, Calif., Feb. 16, 2022 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its first quarter ended Jan. 30, 2022.
First Quarter Results
Applied generated revenue of $6.27 billion. On a GAAP basis, the company achieved gross margin of 47.2 percent, operating income of $1.98 billion or 31.5 percent of net sales, and earnings per share (EPS) of $2.00.
On a non-GAAP adjusted basis, the company reported gross margin of 47.3 percent, operating income of $1.99 billion or 31.7 percent of net sales, and EPS of $1.89.
The company generated a record $2.66 billion in cash from operations and returned $2.02 billion to shareholders including $1.80 billion in share repurchases and $214 million in dividends.
“While the supply environment remains challenging, Applied Materials is doing everything we can to deliver for our customers and we recorded our highest-ever quarterly revenues,” said Gary Dickerson, President and CEO. “Our outlook for 2022 and beyond is very positive as long-term secular trends drive our markets structurally higher and Applied’s broad technology portfolio puts us in a great position to capture a larger portion of our served markets.”
Results Summary
Q1 FY2022 Q1 FY2021 Change (In millions, except per share amounts and percentages) Net sales $ 6,271 $ 5,162 21% Gross margin 47.2 % 45.5 % 1.7 points Operating margin 31.5 % 24.9 % 6.6 points Net income $ 1,792 $ 1,130 59% Diluted earnings per share $ 2.00 $ 1.22 64% Non-GAAP Adjusted Results Non-GAAP adjusted gross margin 47.3 % 45.9 % 1.4 points Non-GAAP adjusted operating margin 31.7 % 29.0 % 2.7 points Non-GAAP adjusted net income $ 1,696 $ 1,282 32% Non-GAAP adjusted diluted EPS $ 1.89 $ 1.39 36% A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also “Use of Non-GAAP Adjusted Financial Measures” section.
Business Outlook
In the second quarter of fiscal 2022, Applied expects net sales to be approximately $6.35 billion, plus or minus $300 million, which includes the expected impact of ongoing supply chain challenges. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.75 to $2.05.
This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions of $0.01 per share, includes the normalized tax benefit of share-based compensation of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.02 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.
First Quarter Reportable Segment Information
Semiconductor Systems Q1 FY2022 Q1 FY2021 (In millions, except percentages) Net sales $ 4,567 $ 3,553 Foundry, logic and other 60 % 58 % DRAM 25 % 17 % Flash memory 15 % 25 % Operating income $ 1,771 $ 1,261 Operating margin 38.8 % 35.5 % Non-GAAP Adjusted Results Non-GAAP adjusted operating income $ 1,778 $ 1,281 Non-GAAP adjusted operating margin 38.9 % 36.1 % Applied Global Services Q1 FY2022 Q1 FY2021 (In millions, except percentages) Net sales $ 1,320 $ 1,155 Operating income $ 403 $ 332 Operating margin 30.5 % 28.7 % Non-GAAP Adjusted Results Non-GAAP adjusted operating income $ 403 $ 340 Non-GAAP adjusted operating margin 30.5 % 29.4 % Display and Adjacent Markets Q1 FY2022 Q1 FY2021 (In millions, except percentages) Net sales $ 366 $ 411 Operating income $ 76 $ 65 Operating margin 20.8 % 15.8 % Non-GAAP Adjusted Results Non-GAAP adjusted operating income $ 77 $ 75 Non-GAAP adjusted operating margin 21.0 % 18.2 % Use of Non-GAAP Adjusted Financial Measures
Applied provides investors with certain non-GAAP adjusted financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; certain incremental expenses related to COVID-19; impairments of assets; gain or loss on strategic investments; certain income tax items and other discrete adjustments. On a non-GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.
Management uses these non-GAAP adjusted financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Webcast Information
Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation will be available at www.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.
Forward-Looking Statements
This press release contains forward-looking statements, including those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new products and technologies, our business outlook for the second quarter of fiscal 2022 and beyond, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products, our ability to meet customer demand, and our suppliers' ability to meet our demand requirements; transportation interruptions and logistics constraints; global economic and industry conditions; the effects of regional or global health epidemics, including the severity and duration of the ongoing COVID-19 pandemic; global trade issues and changes in trade and export license policies; consumer demand for electronic products; the demand for semiconductors; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; the concentrated nature of our customer base; acquisitions, investments and divestitures; changes in income tax laws; our ability to expand our current markets, increase market share and develop new markets; market acceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; the variability of operating expenses and results among products and segments, and our ability to accurately forecast future results, market conditions, customer requirements and business needs; our ability to ensure compliance with applicable law, rules and regulations; and other risks and uncertainties described in our SEC filings, including our recent Forms 10-K and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.
About Applied Materials
Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible a better future. Learn more at www.appliedmaterials.com.
Contact:
Ricky Gradwohl (editorial/media) 408.235.4676
Michael Sullivan (financial community) 408.986.7977APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONSThree Months Ended (In millions, except per share amounts) January 30,
2022January 31,
2021Net sales $ 6,271 $ 5,162 Cost of products sold 3,312 2,813 Gross profit 2,959 2,349 Operating expenses: Research, development and engineering 654 606 Marketing and selling 167 147 General and administrative 166 161 Severance and related charges (4 ) 152 Total operating expenses 983 1,066 Income from operations 1,976 1,283 Interest expense 57 61 Interest and other income, net 6 18 Income before income taxes 1,925 1,240 Provision for income taxes 133 110 Net income $ 1,792 $ 1,130 Earnings per share: Basic $ 2.02 $ 1.23 Diluted $ 2.00 $ 1.22 Weighted average number of shares: Basic 889 915 Diluted 897 925
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS(In millions) January 30,
2022October 31,
2021ASSETS Current assets: Cash and cash equivalents $ 5,264 $ 4,995 Short-term investments 473 464 Accounts receivable, net 4,405 4,953 Inventories 4,526 4,309 Other current assets 1,039 1,386 Total current assets 15,707 16,107 Long-term investments 2,026 2,055 Property, plant and equipment, net 1,974 1,934 Goodwill 3,479 3,479 Purchased technology and other intangible assets, net 94 104 Deferred income taxes and other assets 2,148 2,146 Total assets $ 25,428 $ 25,825 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 3,867 $ 4,268 Contract liabilities 2,397 2,076 Total current liabilities 6,264 6,344 Long-term debt 5,454 5,452 Income taxes payable 1,068 1,090 Other liabilities 752 692 Total liabilities 13,538 13,578 Total stockholders’ equity 11,890 12,247 Total liabilities and stockholders’ equity $ 25,428 $ 25,825
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS(In millions) Three Months Ended January 30,
2022January 31,
2021Cash flows from operating activities: Net income $ 1,792 $ 1,130 Adjustments required to reconcile net income to cash provided by operating activities: Depreciation and amortization 102 94 Severance and related charges (4 ) 148 Share-based compensation 118 107 Deferred income taxes 1 28 Other 16 — Net change in operating assets and liabilities 633 (86 ) Cash provided by operating activities 2,658 1,421 Cash flows from investing activities: Capital expenditures (144 ) (121 ) Cash paid for acquisitions, net of cash acquired — (12 ) Proceeds from sales and maturities of investments 318 358 Purchases of investments (312 ) (441 ) Cash used in investing activities (138 ) (216 ) Cash flows from financing activities: Common stock repurchases (1,803 ) — Tax withholding payments for vested equity awards (235 ) (142 ) Payments of dividends to stockholders (214 ) (201 ) Cash used in financing activities (2,252 ) (343 ) Increase in cash, cash equivalents and restricted cash equivalents 268 862 Cash, cash equivalents and restricted cash equivalents—beginning of period 5,101 5,466 Cash, cash equivalents and restricted cash equivalents — end of period $ 5,369 $ 6,328 Reconciliation of cash, cash equivalents, and restricted cash equivalents Cash and cash equivalents $ 5,264 $ 6,213 Restricted cash equivalents included in deferred income taxes and other assets 105 115 Total cash, cash equivalents, and restricted cash equivalents $ 5,369 $ 6,328 Supplemental cash flow information: Cash payments for income taxes $ 80 $ 110 Cash refunds from income taxes $ 123 $ 19 Cash payments for interest $ 34 $ 35
APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATIONCorporate and Other
(In millions) Q1 FY2022 Q1 FY2021 Unallocated net sales $ 18 $ 43 Unallocated cost of products sold and expenses (178 ) (167 ) Share-based compensation (118 ) (107 ) Severance and related charges 4 (144 ) Total $ (274 ) $ (375 )
Additional InformationQ1 FY2022 Q1 FY2021 Net Sales by Geography (In millions) United States $ 847 $ 343 % of Total 14 % 6 % Europe $ 281 $ 299 % of Total 4 % 6 % Japan $ 561 $ 458 % of Total 9 % 9 % Korea $ 1,121 $ 1,289 % of Total 18 % 25 % Taiwan $ 1,249 $ 1,200 % of Total 20 % 23 % Southeast Asia $ 225 $ 190 % of Total 3 % 4 % China $ 1,987 $ 1,383 % of Total 32 % 27 % Employees (In thousands) Regular Full Time 28.5 24.2
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTSThree Months Ended (In millions, except percentages) January 30,
2022January 31,
2021Non-GAAP Adjusted Gross Profit Reported gross profit - GAAP basis $ 2,959 $ 2,349 Certain items associated with acquisitions1 6 8 Certain incremental expenses related to COVID-192 — 12 Non-GAAP adjusted gross profit $ 2,965 $ 2,369 Non-GAAP adjusted gross margin 47.3 % 45.9 % Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 1,976 $ 1,283 Certain items associated with acquisitions1 9 13 Acquisition integration and deal costs 4 24 Certain incremental expenses related to COVID-192 — 24 Severance and related charges3 (4 ) 152 Non-GAAP adjusted operating income $ 1,985 $ 1,496 Non-GAAP adjusted operating margin 31.7 % 29.0 % Non-GAAP Adjusted Net Income Reported net income - GAAP basis $ 1,792 $ 1,130 Certain items associated with acquisitions1 9 13 Acquisition integration and deal costs 4 24 Certain incremental expenses related to COVID-192 — 24 Severance and related charges3 (4 ) 152 Realized loss (gain) on strategic investments, net 2 (2 ) Unrealized loss (gain) on strategic investments, net (5 ) (6 ) Income tax effect of share-based compensation4 (58 ) (29 ) Income tax effects related to intra-entity intangible asset transfers 18 20 Resolution of prior years’ income tax filings and other tax items (62 ) (3 ) Income tax effect of non-GAAP adjustments5 — (41 ) Non-GAAP adjusted net income $ 1,696 $ 1,282 1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2 Temporary incremental employee compensation during the COVID-19 pandemic. 3 The severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees. 4 GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. 5 Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes. APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTSThree Months Ended (In millions, except per share amounts) January 30,
2022January 31,
2021Non-GAAP Adjusted Earnings Per Diluted Share Reported earnings per diluted share - GAAP basis $ 2.00 $ 1.22 Certain items associated with acquisitions 0.01 0.01 Acquisition integration and deal costs — 0.02 Certain incremental expenses related to COVID-19 — 0.02 Severance and related charges — 0.13 Unrealized loss (gain) on strategic investments, net (0.01 ) — Income tax effect of share-based compensation (0.06 ) (0.03 ) Income tax effects related to intra-entity intangible asset transfers 0.02 0.02 Resolution of prior years’ income tax filings and other tax items (0.07 ) — Non-GAAP adjusted earnings per diluted share $ 1.89 $ 1.39 Weighted average number of diluted shares 897 925
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTSThree Months Ended (In millions, except percentages) January 30,
2022January 31,
2021Semiconductor Systems Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 1,771 $ 1,261 Certain items associated with acquisitions1 7 10 Acquisition integration costs — (2 ) Certain incremental expenses related to COVID-192 — 12 Non-GAAP adjusted operating income $ 1,778 $ 1,281 Non-GAAP adjusted operating margin 38.9 % 36.1 % AGS Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 403 $ 332 Certain incremental expenses related to COVID-192 — 8 Non-GAAP adjusted operating income $ 403 $ 340 Non-GAAP adjusted operating margin 30.5 % 29.4 % Display and Adjacent Markets Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 76 $ 65 Certain items associated with acquisitions1 1 1 Certain incremental expenses related to COVID-192 — 1 Severance and related charges3 — 8 Non-GAAP adjusted operating income $ 77 $ 75 Non-GAAP adjusted operating margin 21.0 % 18.2 % 1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2 Temporary incremental employee compensation during the COVID-19 pandemic. 3 The severance and related charges related to workforce reduction actions globally across the Display and Adjacent Markets business.
Note: The reconciliation of GAAP and non-GAAP adjusted segment results above does not include certain revenues, costs of products sold and operating expenses that are reported within corporate and other and included in consolidated operating income.UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EFFECTIVE INCOME TAX RATE
Three Months Ended (In millions, except percentages) January 30, 2022 Provision for income taxes - GAAP basis (a) $ 133 Income tax effect of share-based compensation 58 Income tax effects related to intra-entity intangible asset transfers (18 ) Resolutions of prior years’ income tax filings and other tax items 62 Non-GAAP adjusted provision for income taxes (b) $ 235 Income before income taxes - GAAP basis (c) $ 1,925 Certain items associated with acquisitions 9 Acquisition integration and deal costs 4 Severance and related charges (4 ) Realized loss (gain) on strategic investments, net 2 Unrealized loss (gain) on strategic investments, net (5 ) Non-GAAP adjusted income before income taxes (d) $ 1,931 Effective income tax rate - GAAP basis (a/c) 6.9 % Non-GAAP adjusted effective income tax rate (b/d) 12.2 % 
