Applied Materials on Wednesday reported its fourth-quarter profit plummeted as it was hit hard by the economic downturn.

The maker of chips and thin film for solar companies reported net income of $231 million, or $0.17 per share, on revenue of $2.04 billion in the quarter, compared with $422 million, or $0.30 per share, on revenue of $2.37 billion in the same period a year ago.

Wall Street was expecting net income of $217 million on $1.9 billion in revenue.

While Applied beat sales forecasts, the 45 percent drop in profit from the previous year forced the company to launch a restructuring program.

“As Applied moves into fiscal 2009, we will implement further cost-reduction actions due to declining market conditions,” Applied Materials CEO Mike Splinter said in a statement.

The cost-reductions include laying off 1,800 workers, or 12 percent of the staff, by the end of 2009.

Applied’s SunFab thin film solar line was a bright spot. It's the only company unit that has seen increases in both new orders and net sales for the fourth quarter compared to the same period last year.

Applied shares fell $0.70, or 6.57 percent, at $9.95.