The world's largest chip equipment maker, Applied Materials Inc , sharply narrowed its quarterly loss on better-than-expected revenue on Tuesday, thanks to a strong jump in new orders and deep cost cuts, sending its shares up 1.6 percent.

Applied Materials, whose competitors include No. 2 chip equipment maker Tokyo Electron Ltd <8035.T> and KLA Tencor Corp , reported its third consecutive net loss in the third quarter ended July 26 of $55 million, or 4 cents a share.

That is down from a profit of $164.77 million, or 12 cents a share, a year earlier.

Excluding certain items, the company reported a loss of $2 million, or near break-even on a per-share basis, versus a profit of $228 million, or 17 cents a share, a year ago.

Revenue fell 38.9 percent from a year ago to $1.13 billion from $1.85 billion, but came in above expectations for $953.06 million.

Shares of Santa Clara, California-based Applied Materials rose 1.6 percent in after-hours trading after closing down 1.86 percent at $13.22 on Nasdaq.

(Reporting by Clare Baldwin; Editing by Richard Chang)