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Tickers in this Article: AMAT
When Applied Materials (Nasdaq:AMAT) releases its fourth quarter earnings on Thursday, November 15, 2012, analysts are expecting a 85.7% drop in earnings from a year ago. The consensus estimate is 3 cents per share, down from earnings of 21 cents per share a year ago.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: 5 Tricks Companies Use During Earnings Season

What to Expect: The consensus estimate hasn't changed in the last month, but it has dropped from 12 cents three months ago. For the fiscal year, analysts are expecting earnings of 72 cents per share.

Applied Materials' expected revenue of $1.58 billion for the quarter is below last year's reported figure of $2.18 billion by 27.6%. Revenue of $8.66 billion is expected for the fiscal year.

Company Performance: P/E ratio for AMAT is 12.9. The P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: The P/E Ratio: A Good Market-Timing Indicator

The stock price has fallen 8.9% since August 14, 2012, from $11.71 to $10.67. Applied Materials' stock has not been doing very well lately. It fell 88 cents per share between August 31, 2012 and November 2, 2012 to close at $10.81.

The Competition: Applied Materials manufacturers and produces capital equipments, and it provides manufacturing equipment, software, and solutions for the global semiconductor, flat panel liquid crystal displays, solar, and related industries. Most analysts (eight of 16) give Applied Materials a hold rating. In the last three months, the number of buy ratings has increased slightly.

The company's closest competitor in the semiconductors industry is KLA-Tencor (KLAC). Analysts are less optimistic about Applied Materials than about KLA-Tencor. Seven out of 12 analysts rate the latter a buy compared to six of 16 for the former.

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