8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 17, 2005

Applied Materials, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation) 0-6920
(Commission File Number) 94-1655526
(IRS Employer Identification No.)

3050 Bowers Avenue P.O. Box 58039 Santa Clara, CA	95052-8039
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (408) 727-5555

N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On May 17, 2005, Applied Materials, Inc. (“Applied Materials”) announced its financial results for its second fiscal quarter ended May 1, 2005. A copy of Applied Materials’ press release is attached hereto as Exhibit 99.1.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of Applied Materials, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

Exhibit No.	Description
99.1	Press Release issued by Applied Materials, Inc. dated May 17, 2005.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Applied Materials, Inc. (Registrant)
Dated: May 17, 2005	By:	/s/ Joseph J. Sweeney
		Joseph J. Sweeney
		Group Vice President Legal Affairs and Intellectual Property and Corporate Secretary

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release issued by Applied Materials, Inc. dated May 17, 2005.

EX-99.1

EXHIBIT 99.1

Release:	Immediate
Contact:	Paul Bowman (investment community)	David Miller (editorial/media)
	(408) 563-1698	(408) 563-9582

APPLIED MATERIALS ANNOUNCES RESULTS
FOR SECOND FISCAL QUARTER 2005

•   Net Sales: $1.86 billion (5% increase quarter over quarter; 8% decrease year over year)

•   Net Income: $305 million (6% increase quarter over quarter; 18% decrease year over year)

•   EPS: $0.18 ($0.01 increase quarter over quarter; $0.04 decrease year over year)

•   New Orders: $1.55 billion (7% decrease quarter over quarter; 30% decrease year over year)

     SANTA CLARA, Calif., May 17, 2005 — Applied Materials, Inc., the world’s largest supplier of wafer fabrication solutions to the global semiconductor industry, reported results for its second fiscal quarter ended May 1, 2005. Net sales were $1.86 billion, up 5 percent from $1.78 billion for the first fiscal quarter of 2005, and down 8 percent from $2.02 billion for the second fiscal quarter of 2004. Gross margin for the second fiscal quarter of 2005 was 44.0 percent, down from 44.4 percent for the first fiscal quarter of 2005, and down from 46.5 percent for the second fiscal quarter of 2004. Net income for the second fiscal quarter of 2005 was $305 million, or $0.18 per share, up from net income of $289 million, or $0.17 per share, for the first fiscal quarter of 2005, and down from net income of $373 million, or $0.22 per share, for the second fiscal quarter of 2004.

     New orders of $1.55 billion for the second fiscal quarter of 2005 decreased 7 percent from $1.68 billion for the first fiscal quarter of 2005, and decreased 30 percent from $2.21 billion for the second fiscal quarter of 2004. Regional distribution of new orders for the second fiscal quarter of 2005 was: Japan 33 percent, North America 18 percent, Taiwan 18 percent, Korea 13 percent, Europe 9 percent, and Southeast Asia and China 9 percent. Backlog at the end of the second fiscal quarter of 2005 was $2.85 billion, compared to $3.21 billion at the end of the first fiscal quarter of 2005.

     During the second fiscal quarter of 2005, the company repurchased approximately 31 million shares of common stock at an average price of $16.18 per share for an aggregate purchase price of $500 million. Also during the second fiscal quarter of 2005, the company declared a quarterly cash dividend of $0.03 per share, payable on June 8, 2005 to stockholders of record on May 18, 2005.

     “In a market where conditions remained mixed, Applied Materials continued to perform well,” said Mike Splinter, president and chief executive officer of Applied Materials. “Our broad product portfolio provides our customers with enabling technology, as the semiconductor industry continues to adopt 300mm manufacturing and moves into volume sub-100 nanometer production.

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Applied Materials, Inc.
May 17, 2005
Page 2 of 4

     “Applied gained more than three points of market share in calendar 2004, according to independent market researchers, outpacing the semiconductor equipment industry. Our technologies and products are setting benchmarks for the industry. The company’s speed-boosting transistor processes, leading interconnect technologies and extensive suite of inspection and metrology systems are helping customers deliver advanced chips more affordably. Our commitment to providing world-class solutions to customers is the driving force within our company,” concluded Splinter.

     This press release contains forward-looking statements, including statements regarding market conditions and the company’s opportunities, product capabilities and strategic position. Forward-looking statements may contain words such as “expect,” “anticipate,” “believe,” “may,” “should,” “will,” “estimate,” “forecast,” “see,” “promise,” or similar expressions, and include the assumptions that underlie such statements. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Risks and uncertainties include, but are not limited to: the sustainability of demand in the semiconductor and semiconductor equipment industries, which is subject to many factors, including global economic conditions, business spending, consumer confidence, demand for electronic products and semiconductors, and geopolitical uncertainties; customers’ capacity requirements, including capacity utilizing the latest technology; the timing, rate, amount and sustainability of capital spending for new technology, such as 300mm and sub-100 nanometer applications; the company’s ability to successfully develop, deliver and support a broad range of products and services and expand its markets; the ability to maintain effective cost controls and to timely align the company’s cost structure with business conditions; the successful integration and performance of acquired businesses; changes in management; and other risks described in Applied Materials’ Securities and Exchange Commission filings, including its reports on Form 10-K, Form 10-Q and Form 8-K. All forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof. The company undertakes no obligation to update any forward-looking statements.

     Applied Materials will discuss its second fiscal quarter results, along with its outlook for the third fiscal quarter of 2005, on a conference call today beginning at 1:30 p.m. Pacific Time. A webcast of the conference call will be available on Applied Materials’ web site under the “Investors” section.

     Applied Materials, Inc. (Nasdaq: AMAT), headquartered in Santa Clara, California, is the largest supplier of equipment and services to the global semiconductor industry. Applied Materials’ web site is www.appliedmaterials.com.

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Applied Materials, Inc.
May 17, 2005
Page 3 of 4

APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

	Three Months Ended				Six Months Ended
	May 2,		May 1,		May 2,		May 1,
(In thousands, except per share amounts)	2004		2005		2004		2005
Net sales	$	2,018,105	$	1,861,189	$	3,573,553	$	3,641,765
Cost of products sold		1,079,464		1,042,759		1,958,743		2,033,110
Gross margin		938,641		818,430		1,614,810		1,608,655
Operating expenses:
Research, development and engineering		244,175		225,589		486,820		467,351
Marketing and selling		95,975		92,448		184,373		170,278
General and administrative		83,457		88,875		163,751		177,298
Restructuring, asset impairments and other charges		—		—		167,459		—
Income from operations		515,034		411,518		612,407		793,728
Interest expense		11,682		9,815		23,482		19,087
Interest income		26,220		40,449		57,493		77,107
Income before income taxes		529,572		442,152		646,418		851,748
Provision for income taxes		156,224		137,322		190,694		258,153
Net income	$	373,348	$	304,830	$	455,724	$	593,595
Earnings per share:
Basic	$	0.22	$	0.18	$	0.27	$	0.36
Diluted	$	0.22	$	0.18	$	0.26	$	0.35
Weighted average number of shares:
Basic		1,690,617		1,660,584		1,686,193		1,666,627
Diluted		1,729,506		1,671,822		1,732,542		1,679,443

Applied Materials, Inc.
May 17, 2005
Page 4 of 4

APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS

	October 31,			May 1,
(In thousands)	2004*			2005
ASSETS
Current assets:
Cash and cash equivalents	$	1,493,292		$	1,663,749
Short-term investments		5,084,704			4,743,114
Accounts receivable, net		1,670,153			1,595,402
Inventories		1,139,368			1,085,578
Deferred income taxes		610,095			661,836
Other current assets		283,907			255,263
Total current assets		10,281,519			10,004,942
Property, plant and equipment		2,953,130			2,972,966
Less: accumulated depreciation and amortization		(1,607,602	)		(1,673,182	)
Net property, plant and equipment		1,345,528			1,299,784
Goodwill, net		257,321			337,825
Purchased technology and other intangible assets, net		50,291			76,260
Deferred income taxes and other assets		158,786			197,347
Total assets	$	12,093,445		$	11,916,158
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	45,864		$	46,466
Accounts payable and accrued expenses		1,895,061			1,757,039
Income taxes payable		347,056			358,575
Total current liabilities		2,287,981			2,162,080
Long-term debt		410,436			414,302
Other liabilities		133,001			157,832
Total liabilities		2,831,418			2,734,214
Stockholders’ equity:
Common stock		16,803			16,477
Additional paid-in capital		2,070,733			1,401,418
Deferred stock compensation, net		(96	)		–
Retained earnings		7,164,170			7,757,765
Accumulated other comprehensive income		10,417			6,284
Total stockholders’ equity		9,262,027			9,181,944
Total liabilities and stockholders’ equity	$	12,093,445		$	11,916,158

* Certain amounts in the October 31, 2004 consolidated condensed balance sheet have been reclassified to conform to the 2005 presentation.