In the quarter, Applied Materials, the world's largest chip equipment maker, reported first quarter earnings before charges of $52.9 million (£32.3 million), or 14 cents a share, well ahead of Wall Street estimates of 6 cents a share.
Including acquisition charges, the company reported earnings of $42.5 million (£25.9 million), or 11 cents a share. In the same quarter a year ago, Applied reported profits of $197.8 million (£120.1 million), or 52 cents a share.
Sales were $742 million (£452 million), down 43 percent from $1.31 bn (£797 million) a year ago, but up 10 percent from $673 million (£410 million) in the fourth quarter.
The company said orders were picking up as the semiconductor sector breaks out of a slump. New orders of $1.03 bn (£628 bn) for the first quarter, up from $684 million (£417 million) in the previous. Orders were still down from $1.29 billion (£786 million) in the first quarter a year ago.
By region, North America represented 38 percent of the company's total new orders, Europe 17 percent, Japan 20 percent, Korea 6 percent, Taiwan 14 percent and Southeast Asia and China 5 percent. Backlog at the end of the first quarter jumped to $1.15 billion (£701 million), from $917 million (£559 million) in the fourth quarter. "We are pleased with our first quarter results, especially the order momentum exiting the quarter," said James C. Morgan, CEO of Applied in a statement. "We believe the industry is in a recovery stage due to stabilisation of memory prices and customer migration to 0.18 micron technologies."
Morgan also said he expected the chip recovery to continue. "The near-term outlook for our industry is favourable, with an improved DRAM pricing environment, healthy PC demand and a strong U.S. economy," said Morgan. "Our product positioning, combined with the benefits of our global infrastructure, should enable the company to take advantage of this opportunity."