Applied Materials Details Strategy to Drive Sustainable Growth
September 21 2016 - 3:23PM
At its 2016 Analyst Day, Applied Materials, Inc. detailed its
innovation leadership strategy to drive sustainable growth and
announced target non-GAAP adjusted earnings per share of $2.45 to
$3.17 for fiscal 2019, with a midpoint of $2.80. This would
represent compound earnings growth of approximately 17 percent over
the next three years.
Applied highlighted how the semiconductor industry’s major
transition from lithography-based scaling to materials-enabled
scaling has increased Applied’s addressable opportunity from 53
percent of WFE spending in calendar 2012 to an estimated 63 percent
this year. With the broadest portfolio of materials engineering
technologies and its unique Product Development Engine process,
Applied now expects to achieve a 4-point gain in its share of WFE
spending and nearly double its display business, from 2012 through
2016. By delivering enabling service products to support customers
as they make these challenging technology transitions, the company
expects to grow its services business revenue by $600 million from
fiscal 2013 through 2016.
“Our innovation leadership strategy, combined with the breadth
and depth of our materials engineering capabilities, puts Applied
in a unique position to sustainably outperform our markets,” said
Gary Dickerson, president and CEO. “Over the past few years, we
strengthened our organization and processes while increasing
investment in R&D, so that today we see opportunities earlier,
develop winning products faster and are delivering increased value
for customers and shareholders.”
“We are raising the ceiling on our financial model based on our
confidence that we have the right capability, strategy and
operating model to deliver sustainable growth in the near and long
term,” said Robert Halliday, senior vice president and CFO.
Large, multi-year inflections are driving sustained growth in
semiconductor and display: the evolution of 3D NAND; transition to
10/7nm nodes; growing need for 3D materials-enabled patterning;
increasing investments in China by domestic and multinational
companies; and accelerated adoption of OLED displays. These
technology inflections are enabled by materials innovation, which
plays directly to Applied’s strengths and expands its available
market.
Multiple longer term technology drivers, including
augmented/virtual reality and smart vehicles, will fuel the need
for higher performance computing, better networks and more and new
types of memory. These emerging drivers are expected to create new
opportunities for Applied’s leading materials engineering
technologies and products, and increase WFE and display industry
investment in coming years.
A replay of the 2016 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 targets assume 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, 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 our financial model, 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 21, 2016, 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 the technology shaping the future. Learn
more at www.appliedmaterials.com.
Contact:Kevin Winston (editorial/media)
408.235.4498Michael Sullivan (financial community) 408.986.7977
Applied Materials (NASDAQ:AMAT)
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