Applied Materials Enabling Bigger Waves of Profitable Growth
September 27 2017 - 3:09PM
At its 2017 Analyst Day, Applied Materials, Inc. unveiled a new
three-year financial outlook and illustrated how materials
innovation is enabling a new era of computing to make possible IoT,
big data and artificial intelligence (A.I.). The company is
targeting non-GAAP adjusted earnings per share (EPS) of $5.08 for
fiscal 2020 based on a $45 billion wafer fab equipment (WFE) market
with increases in market share, gross margin, R&D investment
and operating profit.
“Our markets are strong and getting stronger. New technology
inflections like A.I. and big data will increase demand for
high-performance semiconductor processing and storage,” said Gary
Dickerson, president and CEO of Applied Materials. “With the
industry’s broadest and most innovative technologies, Applied
Materials helps accelerate customer roadmaps by enabling chips and
displays to be built in entirely new ways.”
“As we enter a new era in computing, market demand is stronger,
customer profitability is increasing and capital intensity is
rising,” said Dan Durn, senior vice president and CFO of Applied
Materials. “These factors combined with the strength of our diverse
portfolio give us confidence in our ability to deliver higher
levels of profitable growth.”
A.I. and big data are sparking a renaissance in chip design with
new types of processors in development by a larger set of
companies. More logic and DRAM capacity will be needed to process
the increase in data, along with more NAND capacity for faster
processing and storage. Based on this and the continued growth of
silicon content in smartphones, Applied expects WFE spending in
2017 and 2018 combined to be $90 billion.
In Services, Applied expects to deliver compound annual growth
of 15 percent for the next three years to reach $4.5 billion in
revenue by 2020 driven by continued strong demand for its
equipment, higher process complexity and greater demand for
comprehensive service agreements. In Display, Applied expects 23
percent in compound annual growth over the same period, led by
increases in consumer demand for larger, more life-like displays in
the TV and mobile device markets, which are enabled by Applied’s
leadership in large-area materials engineering.
Applied is committed to investing in attractive growth
opportunities and distributing excess cash to shareholders through
share repurchases and dividends. The company announced a new share
repurchase program authorizing up to an additional $3 billion in
repurchases. As of the end of the company’s fiscal third quarter,
approximately $995 million remained available under the prior
authorization.
A replay of the 2017 Analyst Meeting, along with presentations
and related materials, will be available on the Applied Materials
investor relations website at
http://www.appliedmaterials.com/company/investor-relations.
Non-GAAP Adjusted Financial Measures
The non-GAAP adjusted EPS target assumes non-GAAP adjustments as
applicable for future periods, which we are unable to predict
without unreasonable efforts due to their inherent uncertainty.
Management uses non-GAAP adjusted financial measures to evaluate
the company's operating and financial performance and for planning
purposes. Applied believes these measures enhance investors’
ability to review the company’s business from the same perspective
as the company’s management, and facilitate comparisons between
periods on a consistent basis. There are limitations in using
non-GAAP financial measures because they are not prepared in
accordance with GAAP and may differ from non-GAAP methods of
accounting and reporting used by other companies.
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 anticipated levels of
capital equipment spending, technology inflections, our strategies,
our development of new products and technologies, the anticipated
demand for our products, growth in our market share positions and
opportunities, our business and financial performance and outlook,
our financial model, capital allocation, and investment and growth
strategies, 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;
global economic and industry conditions; consumer demand for
electronic products; customers’ technology and capacity
requirements; the introduction of new and innovative technologies,
and the timing of technology inflections; our ability to develop,
deliver and support new products, expand our markets and increase
market share; the concentrated nature of our customer base; 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, 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; and other risks and uncertainties described in our
most recent Form 10-Q and other SEC filings. All forward-looking
statements are based on management’s estimates, projections and
assumptions as of September 27, 2017, and we assume no obligation
to update them.
About Applied MaterialsApplied 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
the technology shaping the future. Learn more at
www.appliedmaterials.com.
Contact:Ricky Gradwohl (editorial/media)
408.235.4676Michael Sullivan (financial community) 408.986.7977
Applied Materials (NASDAQ:AMAT)
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