Applied Materials Inc. (AMAT – Free Report) reported robust fiscal third-quarter 2018 results, with both the top and bottom lines surpassing the Zacks Consensus Estimate.

The company’s pro-forma earnings per share (EPS) of $1.20 beat the consensus mark by 4 cents and came in at the higher end of the guided range of $1.13-$1.21 per share. Earnings were up 40% year over year.

Revenues of $4.47 billion were above the Zacks Consensus Estimate of$4.44 billion and were within the guided range of $4.33-$4.53 billion, decreasing 2.2% sequentially but increasing 19.3% year over year. The revenue growth was backed by higher demand in most of the regions compared with the year-ago quarter.

Despite strong fiscal third-quarter results, the company’s share price declined 4.6% due to weaker-than-expected revenue guidance for the fiscal fourth quarter. Also, shares have increased 7.1% in the past 12 months, underperforming the industry’s rally of 19.8%.

Inflection-focused innovation strategy was the primary growth driver. The company continues to witness technological advancements in semiconductor and flat-panel display areas. 3D NAND, DRAM and patterning led to significant market share gains.

Applied Materials remains strongly positioned in China, where it continues to witness robust growth in semiconductor and display. Growing investments from Chinese domestic manufacturers have been a major growth catalyst.

Notably, the company gained considerable success in expanding beyond semiconductors, particularly in display. Mobile OLEDs and large screen televisions are opening new market opportunities for Applied Materials.

The company sees significant opportunities from emerging trends on the semiconductor and display fronts such as artificial intelligence, big data, cloud infrastructure, Internet of Things (IoT), virtual reality and smart vehicles.

We believe that Applied Materials is in a great position to grow sustainably and profitably, based on its strong pipeline of enabling technologies, supported by expanding opportunities on the semiconductor, service and display fronts.

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