Applied Materials Inc's quarterly revenue and profit beat market estimates due to increased demand for its chip equipment spares, consulting services and gear used to make display screens.
Shares of the company, whose customers include Samsung Electronics Co Ltd and Taiwan Semiconductor Manufacturing Co Ltd, were up 2.5 percent in after-market trading on Thursday.
Revenue in its applied global services business jumped 21 percent to $646 million in the second quarter ended April 26, Applied Materials said.
The business manufactures spares and remade equipment and provides consulting services to help chipmakers improve operating efficiency and reduce costs.
Spending on chip-making gear would rise 5.6 percent this year, market research firm Gartner forecast in January. (http://gtnr.it/1DWPlqo)
New orders in the silicon systems group, Applied Materials' biggest business, rose 2.4 percent to $1.70 billion. However, revenue in the unit, which accounts for about two-thirds of total revenue, declined 1.5 percent.
Sales at the company's display business, which makes chip equipment for flat panel displays, increased 10.9 percent to $163 million.
Applied Materials, which also provides equipment to make flat panel displays and solar cells, said it expected revenue for the current quarter to be up 2-6 percent sequentially. That translates to $2.49 billion-$2.59 billion in revenue.
The company also said it expects an adjusted profit of 31-35 cents per share for the third quarter.
Analysts on average were expecting revenue of $2.52 billion and profit of 33 cents per share for this quarter, according to Thomson Reuters I/B/E/S.
Applied Materials last month scrapped a $10 billion planned takeover of rival Tokyo Electron Ltd.
The company's net income rose to $364 million, or 29 cents per share, in the second quarter, from $262 million, or 21 cents per share, a year earlier.
Excluding items, Applied Materials earned 29 cents per shares, beating the average analyst estimate of 28 cents.
Revenue rose to $2.44 billion from $2.35 billion, ahead of the $2.40 billion analysts expected.
(Reporting by Anya George Tharakan and Sai Sachin R in Bengaluru; Editing by Joyjeet Das)