Applied Materials posted a lower quarterly profit as revenue declined 8 percent amid a slump in the semiconductor equipment manufacturing industry, but the company's performance beat expectations.
Shares of the company , the biggest producer of chipmaking equipment, climbed more than 3 percent in extended trading Tuesday.
"We executed well in a challenging global chip equipment market," Chief Executive Mike Splinter said in a statement, pointing to strength in new orders paced by demand for its display products and orders for its first SunFab Thin Film Line, devices used in the manufacture of solar panels.
Net income for its first fiscal quarter declined to $262.4 million, or 19 cents per share, from $403.5 million, or 29 cents per share, a year ago. Revenue fell to $2.09 billion from $2.28 billion.
But earnings excluding stock-based compensation expenses and other charges were 23 cents per share, beating the average analyst forecast of 20 cents, according to Reuters Estimates.
Analysts had expected revenue of $2.08 billion, on average.
Orders in the first quarter were $2.5 billion, a 2 percent decrease from the year-ago period, but a 13 percent rise from the preceding quarter.
Taiwan represented 32 percent of orders, North America 20 percent, Korea 14 percent, Japan 12 percent, Southeast Asia and China 11 percent, and Europe 11 percent.
Backlog at the end of the first quarter was $4.10 billion, up from $3.65 billion at the end of the preceding quarter.
Splinter has said he expects fiscal 2008 revenue to be little changed to slightly down, despite a forecast for capital spending in the chip industry to fall 5 percent to 15 percent this year.
Shares of Applied are up less than 1 percent so far this year. In the past 12 months, the stock has declined about 2 percent, compared with a 25 percent decline in the Philadelphia Semiconductor Index.
Shares of Applied fell 36 cents, or 2 percent, to close at $18.07. In extended trade, they rose 3.5 percent to $18.70.