UPDATE 2-Applied Materials sees turnaround but cuts jobs

* Q4 10 cents/share vs 3 cents/share estimate

* Says to slash up to 1,500 jobs, cut costs in fiscal 2010

* Seeing early signs of turnaround in chip business

(Adds outlook, executive comments, background and byline)

By Poornima Gupta

SAN FRANCISCO, Nov 11 (Reuters) - Applied Materials Inc (AMAT.O), the world's largest producer of chip-making gear, said on Wednesday that its microchip business was starting to turn around and posted its first quarterly profit in a year, but it plans to cut as much as 12 percent of its workforce.

Stung by a severe decline in the sales of its core semiconductor manufacturing equipment, Applied Materials has moved aggressively into solar equipment to spur growth. But that market has also been pinched by the economic downturn.

Looking forward, the company expects net sales to increase 30 percent in fiscal 2010 and estimated earnings for the first quarter of between 4 cents and 8 cents per share, including restructuring charges. Analysts on average forecast a profit of 6 cents a share for the first quarter, according to Thomson Reuters I/B/E/S.

Applied Materials Chief Executive Mike Splinter also said the company saw improvement in the solar photovoltaic market during the fourth quarter, with module price decline slowing and financing opportunities gradually improving.