Applied Materials to cut 1,300 to 1,500 jobs

AP News
Posted: Nov 11, 2009 6:24 PM

Applied Materials Inc. said Wednesday that fiscal fourth-quarter net income fell by 40 percent and announced it would cut 1,300 to 1,500 jobs to save money as it grapples with a business downturn.

The chip equipment maker said the job cuts represent 10 to 12 percent of its global work force and are part of a restructuring plan to save $450 million a year. That's in addition to the $460 million in cost cuts it achieved in fiscal 2009, which ended Oct. 25.

Applied Materials said it expects to take a pretax charge related to its restructuring plan of $100 million to $125 million, most of which will be booked in the first quarter. The job cuts will be completed over the next 18 months.

The company earned $137.9 million, or 10 cents per share, in the quarter, compared with $231.1 million, or 17 cents, in the same quarter a year earlier.

Excluding one-time items, the company earned $177 million, or 13 cents per share, compared with $37 million, or 3 cents.

Sales fell 25 percent to $1.53 billion from $2.04 billion. Results beat the 3-cents per share in profit expected by analysts polled by Thomson Reuters, and exceeded their revenue forecast of $1.32 billion.

Net sales fell in all business lines except for its display business, while operating income declined across the board. New orders fell for all units except display.

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But compared to the third quarter, business improved sequentially.

For the year, Applied Materials lost $305.3 million, or 23 cents per share, compared with net income of $960.7 million, or 70 cents a share. Sales fell 38 percent to $5.01 billion from $8.13 billion.

Applied Materials expects sales to increase by over 30 percent in fiscal 2010, or roughly $6.5 billion. That's higher than analysts' forecast of $6.2 billion.

Shares of Applied Materials, based in Santa Clara, Calif., rose 16 cents to $13.41 in after-hours trading. The stock ended the regular session at $13.25, up 25 cents.