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Omar Venerio
Omar Venerio
Articles (1680) 

Major US Indexes Gain on Friday

​Shares of Applied Materials fall on weak earnings

After an initial decline on the back of retail sales plunging 16.4% in April due to the Covid-19 pandemic, according to the Commerce Department, U.S. stock market indexes recovered slightly. The Dow Jones Industrial Average rose 0.23% to 23,678.51, the S&P 500 index increased 0.18% to 2,857.67 and the Nasdaq Composite Index swelled 0.37% to 8,977.88.

Non-index stocks have also posted gains and losses recentlyShares of Applied Materials Inc. (NASDAQ:AMAT) fell more than 4% on Fridayafter the company announced second-quarter results. It posted earnings of 89 cents per share, which was in line with estimates. Revenue of $3.96 billion grew 11.9% year over year, but fell $20 million short of expectations.

“As we navigate the challenges created by Covid-19, we have rallied the company around safety, productivity and keeping our customers and the industry moving forward,” CEO Gary Dickerson said. “While the situation remains fluid, based on the visibility we have today, our supply chain is recovering, and underlying demand for our semiconductor equipment and services remains robust.”

Sales in the Semiconductor Systems Group totaled $2.6 billion sales (65% of net sales), up 17.5% year over year. The Applied Global Services segment recordedsales of $997 million (26% of net sales), up 3.5% from the prior-year quarter. The Display and Adjacent Markets reported revenue of $332 million (9% of net sales), up 4.9% when compared to a year ago.

The non-GAAP gross margin was 44.6%, up 110 basis points from the year-ago quarter, while the non-GAAP operating margin was 24.7%, up 230 basis points from the prior-year period.

On a year-over-year basis, sales in all the countries declined except Korea, Taiwan and China, which witnessed growth of 70.7%, 36.5% and 14.6%.

Furthermore, the company returned $392 million to shareholders via $199 million in share repurchases and $193 million on dividends.

Hedge funds were active during the first quarter. John Hussman increased his holding by 61% to 66,150 shares and Ken Fisher (Trades, Portfolio) boosted his stake 34,683% to 1,630,993 shares. PRIMECAP Management (Trades, Portfolio) boosted its position16% to 5,768,635 shares.

Gainers

Losers

Global markets

The main European stock markets traded mostly in the greenThe U.K.'s FTSE 100 gained 1.01%, France's CAC 40 rose 0.11%, Germany's Dax advanced1.24% and Spain's Ibex 35 dipped 1.08%.

In Asia, Japan's Nikkei 225 gained 0.62%, India’s BSE Sensex declined 0.08%, Hong Kong's Hang Seng slid 0.14% and China's Shanghai Composite dipped 0.07%.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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