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Weak solar demand fails to impact Applied Materials Q1 results

Equipment manufacturer Applied Materials has posted strong first quarter (Q1) 2012 results, including a non-GAAP operating income of US$240 million, from net sales of $2.19 billion. Sales were down $50 million year-on-year, but up slightly up from the fourth quarter (Q4) 2011.

While oversupply was blamed for weak demand from the solar business, and a subsequent loss, strong demand in other business segments resulted in significant profits.

The Energy and Environment Solutions business, which supplies the solar industry, reported significantly reduced sales of $33 million, down 62 percent. The solar business segment, meanwhile, had a non-GAAP operating loss of $17 million.

Applied Materials' total gross margin from the quarter was 40.7 percent, up from 39.5 percent in the Q4 2011. After the company acquired the Varian business in the quarter, cash and equivalents decreased to $2.95 billion.

"Applied delivered net sales and earnings above the high end of our expectations," said George Davis, Chief Financial Officer. The company has forecast earnings to increase by five percent in the second quarter of the year.