Applied Materials posted a quarterly profit that beat expectations, as the top supplier of equipment for producing microchips benefited from higher capital spending by makers of memory chips.
The maker of equipment for manufacturing semiconductors said it earned 34 cents a share in the quarter. Applied had been seen reporting earnings of 28 cents a share, according to a consensus of equity analysts from Thomson Financial.
Revenue was $2.53 billion, up 13% from $2.25 billion a year earlier and ahead of the average analyst estimate of $2.35 billion.
"While the market for display remained soft, silicon and fab solutions exceeded expectations fueled by continued high levels of memory investment and momentum from market share gains," Chief Executive Mike Splinter said in a statement.
Applied said new orders in the quarter rose 6% on the year to $2.65 billion, while gross margin fell to 44.9%, from 46.5% a year earlier.
Applied Materials and other chip equipment suppliers such as Japan's Tokyo Electron have seen strong sales and profits in recent quarters on the back of booming orders from memory chip makers.