Applied Materials Inc.'s (AMAT) fiscal second-quarter earnings jumped 85%, but the semiconductor equipment company warned that near-term economic conditions are causing "tempered" growth expectations.

Companies across the semiconductor industry have been posting strong quarterly results and guidance in recent weeks, but consumer demand has remained weak in certain segments, and the earthquake, tsunami and nuclear crisis in Japan has also taken a toll on the sector.

Tuesday, Applied Materials--which makes tools used to produce semiconductors, television screens and solar panels--projected cautious fiscal third-quarter results and lowered expectations for 2011 wafer fab equipment spending.

The Santa Clara, Calif.-based, company said its growth expectations have been tempered by near-term economic conditions, including inflation in emerging markets, unrest in the Middle East and the disaster in Japan.

"Our customers are increasingly driven by consumer products...so these things are affecting our customers' end markets," Chief Financial Officer George Davis said in an interview. "There's a lot of fundamental strength in the markets, but people are digesting the near-term consumer impact."

He noted the economic conditions are leading certain display and semiconductor customers to push out orders as they take a pause from their heavy spending in the first half of the year. But Davis said he doesn't believe the pushouts are related to Japan.

Applied expects wafer fab equipment spending of $31 billion to $34 billion this year, down from its previous guidance of $34 billion to $36 billion.

"That's mainly due to foundry pushouts in 2011 that should come back in 2012," Davis said. "We've also seen that memory spending, because of economic conditions, looks to be a little lighter in the second half than we anticipated."

Chief Executive Mike Splinter said during a conference call that the company still expects 2012 wafer fab equipment spending to be about $35 billion, plus or minus a couple of billion dollars.

"The puts and takes haven't changed all that much," he said. "I would say that some of these pushouts that may go into 2012 would actually strengthen our view at the current time."

Shares, up 9.8% over the past 12 months through Tuesday's close, slipped 2.2% to $13.41 after hours.

In recent years, Applied has expanded into new markets, including the development of a business selling equipment used to make solar panels. The company earlier this month reached a deal to acquire Varian Semiconductor Equipment Associates Inc. (VSEA) for $4.9 billion in cash, giving it technology that's used to build the transistors that are the basis of chips.

Applied Materials on Tuesday called the second quarter one of the best in its history, with record sales in its solar business.

For the quarter ended May 1, Applied Materials posted a profit of $489 million, or 37 cents a share, up from $264 million, or 20 cents a share, a year earlier. Excluding charges related to takeovers, per-share earnings rose to 38 cents from 22 cents.

Net sales increased 25%, to $2.86 billion. Sequentially, sales rose 6.6%.

In February, Applied Materials forecast upbeat results, predicting per-share earnings of 34 cents to 38 cents, with sales ranging from flat to up 5% sequentially.

Gross margin rose to 41.5% from 40.4%.

Looking to the current quarter, the company predicted earnings largely below estimates, calling for per-share earnings between 31 cents and 37 cents on a sequential sales decline range from 3% to 10%. Analysts surveyed by Thomson Reuters were expecting earnings of 37 cents a share, with a revenue estimate that implied a 2.6% sequential drop.

Davis said during a conference call that the forecast for the second half of the year has moderated from the company's previous view. He added Applied Materials would have to see a fourth quarter sequentially higher than projections for the third quarter from the company to meet its guidance for the year.

"Achieving this outlook will depend on our customers seeing evidence of strengthening consumer demand over the next few months," he said.

-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

--Joan E. Solsman contributed to this report.

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