Applied Materials tops Q4 earnings estimates, posts record revenue

Yahoo Finance Live anchors discuss fourth-quarter earnings for Applied Materials.

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BRIAN SOZZI: Welcome back. Let's take a look at a few hot tickers on Yahoo! Finance ahead of that opening bell on Wall Street. Starting with Applied Materials. Out with a beat on the top and bottom lines in its latest quarter. Reporting record revenue results.

So yeah, the Street is liking this one, guys. Some-- a positive one for a change from someone in techland. I will note this, though, Citi pointing out that A-Mat did talk about push outs and cancellations in its backlog. Notably from some Memory customers. Not exactly a positive sign but overall, this quarter being embraced.

BRAD SMITH: Yeah, record quarterly revenue $6.75 billion. That's up 10% year-over-year. And this adds on to what we had heard from NVIDIA just two days ago. And with that, you've got a little bit more of a sense from the semiconductor names that there could be at least, you know, in the far distant future it seems, based upon who you ask, there could be a light at the end of the tunnel. It's just about where they're able to bring capacity online.

But then also make sure that you're not sacrificing any of the existing sale prices that you've come to expect from the demand side of the equation, too. But record annual revenue. This also rounds out their full-year, record annual revenue of about $25.8 billion we'll round that off to.

JULIE HYMAN: What's also really important in these results is that analysts were reassured about the China restrictions, right? We heard a little bit of color on that from NVIDIA as well. And analysts are basically saying, Applied Materials is not-- it's not a worst-case scenario, right? They are doing better relative to their peers.

Bloomberg Intelligence also pointing out that order backlog will help cushion it against the blow from the restrictions, even though the company says that they could eat into its annual sales. So that's something we have to continue to watch, not just for Applied Materials but really for the whole chip sector.

Because we-- you know, lot of the commentary has been that they still don't really fully grasp what effect the US restrictions on sales of certain components to certain Chinese companies, what effect that is going to have. So that's something that we're going to have to continue to watch in the coming quarters as well.

BRIAN SOZZI: Absolutely.

BRAD SMITH: Yeah, we had actually really just seen some of the kind of coming back to the table between the US and China. And so it's a larger question of where on the intellectual property front or where on the rollbacks of the ability to sell into China, where that also gets re-addressed between the two entities and the leaders as they set up, at least, some of their representatives to dedicate ongoing conversations to, around this and many other IP related or business matters as well.

BRIAN SOZZI: We sure made Applied Materials sound like the second coming. I didn't know it was such an exciting company but clearly it is.

BRAD SMITH: Exciting space.

BRIAN SOZZI: Yeah, exciting space.

JULIE HYMAN: It's a big company.

BRIAN SOZZI: It is.

JULIE HYMAN: I think it is the biggest chip equipment maker, is it not?

BRAD SMITH: Yeah.

JULIE HYMAN: Maybe ASML is--

BRIAN SOZZI: Well, I'm gonna read their annual report again this weekend. I'm excited about it. All 197 pages.

JULIE HYMAN: Have fun with that.