Have you assessed how the international operations of Applied Materials (AMAT) performed in the quarter ended January 2026? For this maker of chipmaking equipment, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.
In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.
Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.
In our recent assessment of AMAT's quarterly performance, we discovered notable trends in its overseas revenue sections, which are typically modeled and scrutinized by Wall Street analysts.
For the quarter, the company's total revenue amounted to $7.01 billion, experiencing a decline of 2.2% year over year. Next, we'll explore the breakdown of AMAT's international revenue to understand the importance of its overseas business operations.
Unveiling Trends in AMAT's International Revenues
China generated $2.1 billion in revenues for the company in the last quarter, constituting 29.9% of the total. This represented a surprise of +6.15% compared to the $1.97 billion projected by Wall Street analysts. Comparatively, in the previous quarter, China accounted for $1.96 billion (28.9%), and in the year-ago quarter, it contributed $2.24 billion (31.3%) to the total revenue.
Of the total revenue, $221 million came from Europe during the last fiscal quarter, accounting for 3.2%. This represented a surprise of -13.8% as analysts had expected the region to contribute $256.38 million to the total revenue. In comparison, the region contributed $220 million, or 3.2%, and $330 million, or 4.6%, to total revenue in the previous and year-ago quarters, respectively.
Japan accounted for 7.5% of the company's total revenue during the quarter, translating to $525 million. Revenues from this region represented a surprise of +1.22%, with Wall Street analysts collectively expecting $518.68 million. When compared to the preceding quarter and the same quarter in the previous year, Japan contributed $448 million (6.6%) and $540 million (7.5%) to the total revenue, respectively.
During the quarter, Korea contributed $1.46 billion in revenue, making up 20.8% of the total revenue. When compared to the consensus estimate of $1.41 billion, this meant a surprise of +3.22%. Looking back, Korea contributed $1.22 billion, or 17.9%, in the previous quarter, and $1.67 billion, or 23.3%, in the same quarter of the previous year.
Southeast Asia accounted for 4.8% of the company's total revenue during the quarter, translating to $335 million. Revenues from this region represented a surprise of +23.46%, with Wall Street analysts collectively expecting $271.34 million. When compared to the preceding quarter and the same quarter in the previous year, Southeast Asia contributed $460 million (6.8%) and $286 million (4%) to the total revenue, respectively.
During the quarter, Taiwan contributed $1.72 billion in revenue, making up 24.6% of the total revenue. When compared to the consensus estimate of $1.81 billion, this meant a surprise of -4.86%. Looking back, Taiwan contributed $1.83 billion, or 27%, in the previous quarter, and $1.18 billion, or 16.5%, in the same quarter of the previous year.
Projected Revenues in Foreign Markets
The current fiscal quarter's total revenue for Applied Materials, as projected by Wall Street analysts, is expected to reach $7.66 billion, reflecting an increase of 7.9% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: China is anticipated to contribute 26% or $1.99 billion, Europe 2.9% or $218.1 millionJapan 7% or $539.62 millionKorea 19.2% or $1.47 billionSoutheast Asia 3.2% or $242.46 million and Taiwan 26.3% or $2.01 billion.
For the full year, the company is expected to generate $30.59 billion in total revenue, up 7.8% from the previous year. Revenues from China, Europe, Japan, Korea, Southeast Asia and Taiwan are expected to constitute 27.2% ($8.32 billion), 2.8% ($864.9 million)7.5% ($2.29 billion)20% ($6.11 billion)3.6% ($1.09 billion) and 26.4% ($8.08 billion) of the total, respectively.
Closing Remarks
The dependency of Applied Materials on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.
In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.
At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.
Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.
Applied Materials currently has a Zacks Rank #1 (Strong Buy), indicating that it could outperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Examining the Latest Trends in Applied Materials' Stock Value
Over the preceding four weeks, the stock's value has appreciated by 12.9%, against a downturn of 1.3% in the Zacks S&P 500 composite. In parallel, the Zacks Computer and Technology sector, which counts Applied Materials among its entities, has depreciated by 4.1%. Over the past three months, the company's shares have seen an increase of 48.1% versus the S&P 500's 2.9% increase. The sector overall has witnessed a decline of 0.1% over the same period.
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Applied Materials, Inc. (AMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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