APPLIED MATERIALS FIRST QUARTER RESULTS EXCEED EXPECTATIONS

Projects Strong Sequential Growth

* Non-GAAP EPS of 18 cents; GAAP EPS of 9 cents
* Orders of $2.0 billion up 26% sequentially led by Silicon Systems Group
* Expects Q2 non-GAAP EPS of 20 to 28 cents

SANTA CLARA, Calif., Feb. 16, 2012 -- Applied Materials, Inc. (NASDAQ:AMAT), the
world´s leading supplier of manufacturing solutions for the semiconductor,
display and solar industries, today reported results for its first quarter of
fiscal 2012 ended January 29, 2012.

Applied generated orders of $2.01 billion and net sales of $2.19 billion. Non-
GAAP operating income was $344 million, and non-GAAP net income was $240 million
or 18 cents per share. GAAP operating income was $179 million, and GAAP net
income was $117 million or 9 cents per share. Applied completed the acquisition
of Varian Semiconductor Equipment Associates, Inc. during the quarter, and the
results include Varian´s operations for the full period.

"Global demand for mobile devices is driving a third consecutive year of strong
capital investment by semiconductor customers, " said Mike Splinter, chairman and
chief executive officer. "As a result, we see solid order momentum and an
improved outlook overall for our second quarter."

"Applied delivered net sales and earnings above the high end of our
expectations, " said George Davis, chief financial officer. "In a quarter in
which we closed the Varian acquisition, we also returned substantial capital to
our stockholders, paying $104 million in cash dividends and using $200 million
to repurchase over 18 million shares of our common stock."

Quarterly Financial Results Summary
+---------------------------+---------------+---------------+---------------+
| GAAP Results | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+---------------------------+---------------+---------------+---------------+
| Net sales | $2.19 billion | $2.18 billion | $2.69 billion |
+---------------------------+---------------+---------------+---------------+
| Operating income | $179 million | $361 million | $674 million |
+---------------------------+---------------+---------------+---------------+
| Net income | $117 million | $456 million | $506 million |
+---------------------------+---------------+---------------+---------------+
| Earnings per share (EPS) | $0.09 | $0.34 | $0.38 |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP Results |   |   |   |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP operating income | $344 million | $384 million | $659 million |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP net income | $240 million | $271 million | $484 million |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP EPS | $0.18 | $0.21 | $0.36 |
+---------------------------+---------------+---------------+---------------+

During the quarter, Varian generated orders of approximately $270 million and
net sales of approximately $200 million which were reported within the Silicon
Systems Group (SSG) and the Applied Global Services (AGS) segments.  The Varian
business contributed approximately $0.01 to the company´s non-GAAP EPS, which
excludes acquisition-related charges equivalent to approximately $0.09 per
share.

Non-GAAP results for the above periods exclude the impact of the following,
where applicable: certain discrete tax items, restructuring and asset impairment
charges and any associated adjustment related to restructuring actions, certain
acquisition-related costs, investment impairments, and gain or loss on sale of
facilities. A reconciliation of the GAAP and non-GAAP results is provided in the
financial statements included in this release. See also "Use of Non-GAAP
Financial Measures" below.

First Quarter Reportable Segment Results and Comparisons to the Prior Quarter

Silicon Systems Group orders were $1.42 billion, up 53 percent reflecting
increased demand in foundry and the addition of Varian´s business. Net sales
were $1.34 billion, up 26 percent. Non-GAAP operating income increased to $386
million or 29 percent of net sales. GAAP operating income was $271 million or
20 percent of net sales. New order composition was: foundry 57 percent, logic
and other 14 percent, flash 19 percent, and DRAM 10 percent.

Applied Global Services orders were $517 million, down 8 percent. Net sales were
$534 million, down 15 percent, in line with the company´s expectations.  AGS
orders and net sales reflected lower wafer starts, partially offset by the
addition of Varian´s business; net sales also reflected lower thin film solar
volumes. Non-GAAP operating income decreased to $113 million or 21 percent of
net sales, reflecting the decrease in net sales. GAAP operating income was $107
million or 20 percent of net sales.

Display orders were $40 million, reflecting ongoing weakness in LCD TV equipment
demand. Net sales were $104 million, down 39 percent, and non-GAAP operating
income decreased to $7 million or 7 percent of net sales, driven by the decrease
in net sales. GAAP operating income was $5 million or 5 percent of net sales.

Energy and Environmental Solutions (EES) orders were $33 million, down 62
percent, reflecting solar industry overcapacity. Net sales were $207 million,
down 34 percent. The segment had a non-GAAP operating loss of $17 million and a
GAAP operating loss of $23 million.

Additional Quarterly Financial Information
* Backlog decreased by $230 million from the fourth quarter to $2.2 billion.
* Non-GAAP gross margin was 40.7 percent, up from 39.5 percent in the fourth
quarter. The GAAP gross margin was 35.9 percent, down from 39.0 percent in
the fourth quarter.
* The effective tax rate was 26.4 percent.
* Cash, cash equivalents and investments decreased to $2.95 billion primarily
due to the acquisition of Varian for approximately $4.2 billion, net of cash
acquired.

Business Outlook
For the second quarter of fiscal 2012, Applied expects net sales to be up 5
percent to 15 percent sequentially. The company expects non-GAAP EPS to be in
the range of $0.20 to $0.28. The non-GAAP EPS outlook excludes known charges
related to completed acquisitions of approximately $0.05 per share but does not
exclude other non-GAAP adjustments that may arise subsequent to this release.

Use of Non-GAAP Financial Measures
Management uses non-GAAP results to evaluate the company´s operating and
financial performance in light of business objectives and for planning purposes.
These measures are not in accordance with GAAP and may differ from non-GAAP
methods of accounting and reporting used by other companies. Applied believes
these measures enhance investors´ ability to review the company´s business from
the same perspective as the company´s management and facilitate comparisons of
this period´s results with prior periods. The presentation of this additional
information should not be considered a substitute for results prepared in
accordance with GAAP.

Webcast Information
Applied Materials will discuss these results during an earnings call that begins
at 1:30 p.m. Pacific Time today. A live webcast will be available
atwww.appliedmaterials.com.

Forward-Looking Statements
This press release contains forward-looking statements, including statements
regarding Applied´s performance, industry outlooks, customer investment, order
momentum,  and business outlook for the second quarter of fiscal 2012. Forward-
looking statements may contain words such as "expect, " "believe, " "may, " "can, "
"should, " "will, " "anticipate" 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, including but not
limited to: the level of demand for Applied´s products, which is subject to many
factors, including uncertain global economic and industry conditions, business
and consumer spending, demand for electronic products and semiconductors,
government renewable energy policies and incentives, and customers´ utilization
rates and new technology and capacity requirements; variability of operating
expenses and results among the company´s segments caused by differing conditions
in the served markets; the concentrated nature of Applied´s customer base;
Applied´s ability to (i) develop, deliver and support a broad range of products,
expand its markets and develop new markets, (ii) timely  align its cost
structure with business conditions, (iii) plan and manage its resources and
production capability, including its supply chain, (iv) implement initiatives
that enhance global operations and efficiencies, (v) integrate Varian´s
operations, product lines, technology and employees and realize synergies, (vi)
obtain and protect intellectual property rights in key technologies, (vii)
attract, motivate and retain key employees, and (viii) accurately forecast
future operating and financial results, which depends on multiple assumptions
related to, without limitation, market conditions, customer requirements and
business needs; and other risks described in Applied Materials´ SEC filings. 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.

About Applied Materials
Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in providing
innovative equipment, services and software to enable the manufacture of
advanced semiconductor, flat panel display and solar photovoltaic products. Our
technologies help make innovations like smartphones, flat screen TVs and solar
panels more affordable and accessible to consumers and businesses around the
world. At Applied Materials, we turn today´s innovations into the industries of
tomorrow. Learn more atwww.appliedmaterials.com.

  APPLIED MATERIALS, INC.

  UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

  Three Months Ended

January   January
29, 30,
(In millions, except per share amounts) 2012 2011

Net sales $ 2,189   $ 2,686

Cost of products sold   1,403     1,550

Gross margin   786     1,136

Operating expenses:

  Research, development and engineering   304     270

  Selling, general and administrative   303     221

  Restructuring charges and asset impairments       -     (29)

Total operating expenses   607     462

Income from operations   179     674

Interest and other expenses   24     5

Interest and other income, net   4     11

Income before income taxes   159     680

Provision for income taxes   42     174

Net income $ 117   $ 506

Earnings per share:

  Basic and diluted $ 0.09   $ 0.38

Weighted average number of shares:

  Basic   1,299     1,324

  Diluted   1,310     1,335

APPLIED MATERIALS, INC.

UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

January   October
29, 30,
(In millions) 2012 2011

ASSETS

Current assets:

  Cash and cash equivalents $ 1,681   $ 5,960

  Short-term investments   316     283

  Accounts receivable, net   1,576     1,532

  Inventories   1,772     1,701

  Deferred income taxes, net   572     580

  Other current assets   240     299

Total current assets   6,157     10,355

Long-term investments   955     931

Property, plant and equipment, net   956     866

Goodwill   3,875     1,335

Purchased technology and other intangible assets,
net   1,519   211

Deferred income taxes and other assets   135     163

Total assets $ 13,597   $ 13,861

LIABILITIES AND STOCKHOLDERS´ EQUITY

Current liabilities:

  Current portion of long-term debt $ 2   $ -

  Accounts payable and accrued expenses   1,327     1,520

  Customer deposits and deferred revenue   1,014     1,116

  Income taxes payable   151     158

Total current liabilities   2,494     2,794

Long-term debt   1,947     1,947

Employee benefits and other liabilities   506     320

Total liabilities   4,947     5,061

Total stockholders´ equity   8,650     8,800

Total liabilities and stockholders´ equity $ 13,597   $ 13,861

APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

  Three Months Ended

January   January
29, 30,
(In millions) 2012   2011

Cash flows from operating activities:

Net income $ 117   $ 506

Adjustments required to reconcile net income to cash
provided by operating activities:

Depreciation and amortization   112     63

Net loss on dispositions and fixed asset retirements   2     1

Provision for bad debts   4     -

Restructuring charges and asset impairments   -     (29)

Deferred income taxes   28     10

Net recognized loss on investments   5     4

Share-based compensation   53     33

Net change in operating assets and liabilities, net of
amounts acquired   (140)     (163)

Cash provided by operating activities   181     425

Cash flows from investing activities:

Capital expenditures   (37)     (24)

Proceeds from sale of facility   -     39

Cash paid for acquisition, net of cash acquired   (4,179)     -

Proceeds from sales and maturities of investments   313     443

Purchases of investments   (254)     (537)

Cash used in investing activities   (4,157)     (79)

Cash flows from financing activities:

Proceeds from common stock issuances   2     13

Common stock repurchases   (200)     (150)

Payment of dividends to stockholders   (104)     (93)

Cash used in financing activities   (302)     (230)

Effect of exchange rate changes on cash and cash
equivalents   (1)       -

Increase (decrease) in cash and cash equivalents   (4,279)     116

Cash and cash equivalents - beginning of period   5,960     1,858

Cash and cash equivalents - end of period $ 1,681   $ 1,974

Supplemental cash flow information:

Cash payments for income taxes $ 33   $ 165

Cash refunds from income taxes $ 3   $ 1

Cash payments for interest $ 41   $ -

Reportable Segment Results
+------------+-----------------------+-----------------------+-----------------------+
|  | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+------------+------+------+---------+------+------+---------+------+------+---------+
| | | |Operating| | |Operating| | |Operating|
| (In | New | Net | Income | New | Net | Income | New | Net | Income |
| millions) |Orders|Sales | (Loss) |Orders|Sales | (Loss) |Orders|Sales | (Loss) |
+------------+------+------+---------+------+------+---------+------+------+---------+
|SSG |$1,418|$1,344| $271 | $925 |$1,067| $278 |$1,610|$1,496| $543 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|AGS | $517 | $534 | $107 | $564 | $629 | $160 | $552 | $567 | $85 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Display | $40 | $104 | $5 | $20 | $171 | $31 | $142 | $147 | $28 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|EES | $33 | $207 | $(23) | $86 | $315 | $17 | $668 | $476 | $144 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Corporate | - | - | $(181) | - | - | $(125) | - | - | $(126) |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Consolidated|$2,008|$2,189| $179 |$1,595|$2,182| $361 |$2,971|$2,686| $674 |
+------------+------+------+---------+------+------+---------+------+------+---------+

Corporate Unallocated Expenses
+------------------------+-----------+-----------+-----------+
| (In millions) | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+------------------------+-----------+-----------+-----------+
| Restructuring charges | | | |
| and asset impairments, | $- | $- | $(1) |
| net | | | |
+------------------------+-----------+-----------+-----------+
| Share-based | $53 | $36 | $33 |
| compensation | | | |
+------------------------+-----------+-----------+-----------+
| Other unallocated | $128 | $89 | $94 |
| expenses | | | |
+------------------------+-----------+-----------+-----------+
| Corporate | $181 | $125 | $126 |
+------------------------+-----------+-----------+-----------+

Additional Information
+-------------------+----------------+----------------+----------------+
|   | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+-------------------+----------------+----------------+----------------+
| New Orders and Net Sales by Geography |
+-------------------+--------+-------+--------+-------+--------+-------+
| (In $ millions) | New | Net | New | Net | New | Net |
| | Orders | Sales | Orders | Sales | Orders | Sales |
+-------------------+--------+-------+--------+-------+--------+-------+
| North America | 467 | 417 | 324 | 434 | 679 | 610 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   % of Total | 23 | 19 | 20 | 20 | 23 | 23 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Europe | 209 | 179 | 176 | 271 | 346 | 278 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   % of Total | 11 | 8 | 11 | 12 | 12 | 10 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Japan | 167 | 217 | 173 | 255 | 187 | 166 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   % of Total | 8 | 10 | 11 | 12 | 6 | 6 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Korea | 666 | 628 | 330 | 363 | 225 | 169 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   % of Total | 33 | 29 | 21 | 17 | 8 | 6 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Taiwan | 367 | 489 | 283 | 353 | 745 | 635 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   % of Total | 18 | 22 | 18 | 16 | 25 | 24 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Southeast Asia | 50 | 79 | 98 | 98 | 135 | 154 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   % of Total | 3 | 4 | 6 | 4 | 4 | 6 |
+-------------------+--------+-------+--------+-------+--------+-------+
| China | 82 | 180 | 211 | 408 | 654 | 674 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   % of Total | 4 | 8 | 13 | 19 | 22 | 25 |
+-------------------+--------+-------+--------+-------+--------+-------+
|   |

+----------------------------------------------------------------------+

| Employees (In thousands) |

+-------------------+----------------+----------------+----------------+

| Regular Full Time | 14.6 | 12.9 | 13.0 |

+-------------------+----------------+----------------+----------------+

 APPLIED MATERIALS,  INC.
 RECONCILIATION OF GAAP TO NON-GAAP RESULTS
  Three Months Ended
 January

(In millions,  except per share 29,  October 30,  January 30, 

amounts) 2012 2011 2011
Non-GAAP Gross Margin
Reported gross margin (GAAP

basis) $ 786   $ 852   $ 1,136
Certain items associated with

acquisitions (1)   104     10     9
Non-GAAP gross margin $ 890   $ 862   $ 1,145
Non-GAAP Operating Income
Reported operating income

(GAAP basis) $ 179   $ 361   $ 674
Certain items associated with

acquisitions (1)   142     13     13
Varian deal cost   23     10     -
Restructuring charges and

asset impairments (2)   -     -     (29)
Loss on sale of facility     -       -     1
Non-GAAP operating income $ 344   $ 384   $ 659
Non-GAAP Net Income
Reported net income (GAAP

basis) $ 117   $ 456   $ 506
Certain items associated with

acquisitions (1)   142     13     13
Varian deal cost   23     10     -
Restructuring charges and

asset impairments (2)   -     -     (29)
Impairment of strategic

investments( )   -     3     -
Loss on sale of facility   -       -     1
Reinstatement of federal R&D

tax credit   -       -     (13)
Resolution of audits of prior

years´ income tax filings   -     (203)     -
Income tax effect of non-GAAP

adjustments   (42)     (8)     6
Non-GAAP net income $ 240   $ 271   $ 484
Non-GAAP Earnings Per Diluted

Share
Reported earnings per diluted

share (GAAP basis) $  0.09   $  0.34   $ 0.38
Certain items associated with

acquisitions    0.08     0.01      0.01
Varian deal cost   0.01     0.01     -
Restructuring charges and

asset impairments   -     -     (0.01)
Reinstatement of federal R&D

tax credit and
resolution of audits of prior

years´ income tax filings   -      (0.15)     (0.01)
Non-GAAP earnings per diluted

share $ 0.18   $ 0.21   $ 0.36
Weighted average number of

diluted shares   1,310     1,321     1,335
(1 )These items are incremental charges attributable to acquisitions,  consisting

of inventory fair value adjustments on products sold,  amortization of purchased

intangible assets,  shared-based compensation associated with accelerated vesting

and other integration costs.
(2) Results for the three months ended January 30,  2011 included asset

impairment charges of $3 million related to a facility held-for-sale,  offset by

favorable adjustments of $28 million related to a restructuring program

announced on July 21,  2010,  and $4 million related to a restructuring program

announced on November 12,  2008.
 APPLIED MATERIALS,  INC.
 RECONCILIATION OF GAAP TO NON-GAAP RESULTS
  Three Months Ended
 January October
 29,  30,  January 30, 

(In millions) 2012 2011 2011
Non-GAAP SSG Operating Income
Reported operating income (GAAP

basis) $ 271   $ 278   $ 543
Certain items associated with

acquisitions (1)   115     3     3
Varian deal cost     -     3     -
Non-GAAP operating income $  386   $ 284   $ 546
Non-GAAP AGS Operating Income
Reported operating income (GAAP

basis) $ 107   $ 160   $ 85
Certain items associated with

acquisitions (1)   6     2     2
Non-GAAP operating income $  113   $ 162   $ 87
Non-GAAP Display Operating

Income
Reported operating income (GAAP

basis) $ 5   $ 31   $ 28
Certain items associated with

acquisitions (1)   2     2     2
Non-GAAP operating income $  7   $ 33   $ 30
Non-GAAP EES Operating Income

(Loss)
Reported operating income (loss)

(GAAP basis) $ (23)   $ 17   $ 144
Certain items associated with

acquisitions (1)   6     6     6
Restructuring charges and asset

impairments (2)     -         -       (28)
Non-GAAP operating income (loss) $  (17)   $ 23   $ 122
(1 )These items are incremental charges attributable to acquisitions,  consisting

of inventory fair value adjustments on products sold,  amortization of purchased

intangible assets,  share-based compensation associated with accelerated

vesting and other integration costs.
(2) Results for the three months ended January 30,  2011 included asset

impairment charges of $3 million related to a facility held-for-sale,  offset by

favorable adjustments of $28 million related to a restructuring program

announced on July 21,  2010,  and $4 million related to a restructuring program

announced on November 12,  2008.


Contact:

Howard Clabo (media) 408.748.5775

Michael Sullivan (investors) 408.986.7977


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 originality of the information contained therein. 


Source: Applied Materials via Thomson Reuters ONE
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