NEW YORK (CNN/Money) - Applied Materials Wednesday reported a slight profit in its fiscal fourth quarter and a much stronger-than-expected uptick in new orders, a sign that the worst may be over for the chip-equipment industry.

The biggest maker of equipment for semiconductor companies said it posted net income of $15 million, or 1 cent a share. Excluding one-time charges, the company posted earnings of $95 million, or 6 cents a share. According to First Call, analysts were expecting earnings of 5 cents a share excluding one-time charges, compared with a profit of 9 cents a year ago.

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Sales came in at $1.22 billion, ahead of Wall Street's estimate of $1.14 billion but down 16 percent from $1.45 billion a year earlier. Still, this is expected to be the last quarter in which Applied Materials posts year-over-year sales and earnings declines, as booking trends for equipment have started to improve.

To that end, the Santa Clara, Calif.-based company's new-orders figure came in at a better-than-expected $1.28 billion, an increase of 21 percent from the third quarter. New orders are a key measure of future sales for chip equipment makers. In August, AMAT told Wall Street to expect new orders of about $1.15 billion for the fourth quarter, 10 percent higher than its fiscal third quarter.

"We are pleased with the improvement in both revenue and orders this quarter," Applied Materials Chief Executive Officer Mike Splinter said in a written statement. "Our revenue and order momentum reflects customers' confidence in business conditions."

Shares of Applied Materials (AMAT: Research, Estimates) rose $1.03, or 4.2 percent, to $25.44 in regular trading on Nasdaq Wednesday. The stock rose another 2.4 percent in after-hours trading, according to Island ECN, taking off after the company boosted guidance for its fiscal first quarter.

During a conference call with analysts, AMAT Chief Financial Officer Joseph Bronson said the company expects new orders in the fiscal first quarter to be up 20 percent from the fourth quarter. He added that first-quarter sales would increase 5-to-7 percent from fourth-quarter levels, which implies a target of $1.28 billion-to-$1.31 billion, ahead of Wall Street's consensus estimate of $1.24 billion.

Bronson also said that earnings per share, excluding charges, should be in a range of 6-to-8 cents a share. Analysts are currently predicting earnings of 8 cents a share.

AMAT's results, particularly in new orders, surpassed even the most bullish of forecasts. Timothy Summers, an analyst with Stanford Financial Group, said he was expecting new orders to grow 15 percent from the third quarter.

It seems that strength in Asia is the key reason behind the better-than-expected results, as companies like Korea's Samsung and Japan's Sony (SNE: Research, Estimates) and Toshiba boost their spending on equipment.

To wit, AMAT said that 25 percent of its new-order growth came from Japan, 17 percent from Southeast Asia and China, 15 percent from Taiwan and 11 percent from Korea. Only 19 percent of the new orders came from North America.

"Pretty much all the demand is coming from Asia," Summers said. "I'm not hearing anything about increased spending from Intel, Texas Instruments or the usual cast of characters just yet."

Patrick Ho, an analyst with Moors & Cabot, said that a pickup from Intel and other U.S.-based chip companies is possible later in 2004, and once that happens we will know for sure that the semiconductor equipment has really bottomed for good.

Nonetheless, AMAT's fourth-quarter results were encouraging since he was expecting new-order growth of 20 percent from the third quarter.

"I hate to say a recovery is definitely here to stay because I would like to see another quarter of sustainable earnings and order growth," said Ho. "But AMAT's report shows the scope of improvement across the industry."

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But during the conference call, Splinter expressed perhaps the strongest degree of confidence about the near-term prospects for the tech sector since companies began reporting their latest results last month.

Splinter said he believed that AMAT's fourth-quarter numbers represented a "turning point for the industry" and added that "a reinvigorated world and U.S. economy" was driving sales. "Strong end user demand is giving our customers the impetus they need to invest in the future," Splinter said.

AMAT's stock has surged 95 percent so far this year. And although Stanford's Summers said that valuations are already starting to approach levels typically seen at the peak of prior cycles for the chip equipment industry, the strong news could fuel momentum for AMAT and chip equipment rivals.

As such, shares of Lam Research (LRCX: Research, Estimates) gained 1.6 percent in after-hours trading, KLA-Tencor (KLAC: Research, Estimates) increased 2.1 percent and Novellus Systems (NVLS: Research, Estimates) rose 2.5 percent.

Moors & Cabot's Ho owns shares of AMAT but his firm has no investment banking relationship with the company. Summers does not own the stock and his firm has no banking ties to the company.