It's no secret that Applied Materials has suffered its fair share of difficulties during the deep and sustained economic morass gripping the tech community.
Tonight however, the company might offer even more evidence that a turnaround in tech is real, and that a double dip might not occur.
The Street expects Applied to report an 8-cent loss on $955.2 million. Applied had earlier offered a loss range of 6 cents to 14 cents, and revenue between $827 million and $1.02 billion. But Applied's ranges came well ahead of strong indications from big customers like Intel, and market research from the Semiconductor Industry Association that thin inventories and sales increases might bode well for the chip industry. In fact, the SIA said global chip sales rose 17 percent sequentially to $51.7 billion during the second quarter, but they were still off 20 percent from the $64.7 billion reported during the same period a year ago.
Of course, those assumptions are a double-edged piece of silicon: on the one hand, signs of a turnaround are good; but on the other, that puts the pressure on Applied to meet or exceed expectations tonight, and offer a rosy outlook for its current quarter.
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But that pressure isn't stopping Credit Suisse from increasing estimates o the company and raising its target to $12.50 a share from $8.25. That's a big increase and speaks to the firm's third quarter expectations of a 9-cent loss on $1.029 billion in revenue. Credit Suisse also anticipates a 3-cent loss in the current quarter on $1.085 billion, along with another, and potentially deeper round of cuts.