Applied Materials fourth-quarter forecast beats estimates, shares rise
(Reuters) – U.S. chip gear maker Applied Materials Inc (AMAT.O) beat Wall Street estimates for quarterly revenue on Thursday and forecast higher-than-expected fourth-quarter revenue and earnings, benefiting from higher demand in its semiconductor business.
Shares of the Santa Clara, California-based company rose more than 3% in extended trading.
The company forecast a fourth-quarter adjusted profit of between 72 cents and 80 cents per share, and net sales of between $3.54 billion and $3.84 billion.
Analysts on average were expecting a profit of 75 cents per share and revenue of $3.64 billion, according to IBES data from Refinitiv.
Revenue from the company’s largest business, semiconductor systems, which supplies gears for chip makers, fell 11.8% to $2.27 billion but beat estimates of $2.17 billion, according to FactSet.
The continued trade dispute between the United States and China has pressured the semiconductor industry in the past few months, but a number of companies including Intel (INTC.O) raised their full-year revenue forecast last month, allaying concerns on demand in China.
Applied Materials’ net sales fell 14% to $3.56 billion in the third quarter, but beat analysts’ average estimate of $3.52 billion.
The company’s net income fell to $571 million, or 61 cents per share, in the quarter ended July 28, from $1.02 billion, or $1.01 per share, a year earlier.
Excluding items, the company earned a profit of 74 cents per share, above analysts’ estimates of 70 cents.
Reporting by Ayanti Bera and Sayanti Chakraborty in Bengaluru; Editing by Maju Samuel