DOW JONES NEWSWIRES Applied Materials Inc.'s (AMAT) fiscal second-quarter profit shrank 41% as the semiconductor-equipment maker's margins narrowed, though revenue dropped less than expected. For the year, the company now expects results at the high end of its March view, which called for a profit of 85 cents to 95 cents a share and revenue of $9.1 billion to $9.5 billion. The company forecast third-quarter earnings of 21 cents to 29 cents a share with revenue flat to down 10% from the prior quarter, amounting to $2.29 billion to $2.54 billion. Analysts polled by Thomson Reuters expected 26 cents and $2.44 billion, respectively. Applied Materials is the largest provider of machines used in making semiconductors, solar panels and displays. Due to tough conditions in the solar market, the company earlier this month said it plans to restructure its solar business and will start posting charges in its third quarter. The company now has reported three consecutive quarters of weaker earnings amid pressure from lagging solar and display markets. Applied Materials, best known for its semiconductor manufacturing equipment business, regularly experiences sharp boom-and-bust cycles triggered by fluctuations in supplies of chips and demand for them. The company has broadened its business to include tools used in making solar panels and displays used in computers and TVs. But supply gluts for manufacturers in those businesses have slowed plans to boost production capacity in the past year and have hurt Applied Materials's results. For the quarter ended April 29, Applied Materials reported a profit of $289 million, or 22 cents a share, from $489 million, or 37 cents a share, a year earlier. Excluding restructuring costs, acquisition-related expenses and other adjustments, per-share earnings were 27 cents. Revenue dropped 11% to $2.54 billion. The company's upbeat February forecast called for a per-share profit of 20 cents to 28 cents with revenue of $2.3 billion to $2.52 billion. Gross margin narrowed to 39.8% from 41.5%. Shares edged up 1.4% after hours Thursday to $10.63. The stock is down 2.2% so far in 2012. -By Ben Fox Rubin and Lauren Pollock, Dow Jones Newswires; 212-416-2356; lauren.pollock@dowjones.com
