On December 17, 2024, you could spot the Applied Materials logo shining. They experienced a rough patch, with their shares dropping over 10% during after-hours trading on Thursday. The semiconductor equipment giant shared its forecast for the current quarter, which came in lighter than expected.
For their third-quarter performance against what’s known as the LSEG consensus estimates, here’s the scoop: they earned $2.48 per share, adjusted, while folks were expecting $2.36. Revenue hit $7.3 billion, slightly above the $7.22 billion predicted.
Looking ahead, Applied Materials expects adjusted earnings of $2.11 per share, falling short of the $2.39 anticipated by LSEG. Revenue is forecast at $6.7 billion, missing the expected $7.34 billion.
CEO Gary Dickerson mentioned that today’s tricky macroeconomic scene and policy landscape are stirring up more doubts and making things less clear, especially affecting their dealings in China.
Concerning the Trump administration’s tariffs, they could see imported chip prices doubling unless companies agree to manufacture within the U.S. Applied Materials provides tools for chip production, primarily occurring in Asia, but they face challenges as a big backlog of export license applications sits waiting with the U.S. government, with no resolution in sight for the next quarter.
They’re bracing for a revenue dip in the fourth quarter due to a slowdown in capacity in China and uneven demand from leading-edge customers. Their finance chief points out that lower business levels in China might linger for several quarters.
In terms of net income, the company posted $1.78 billion, or $2.22 per diluted share in this quarter, compared to last year’s $1.71 billion or $2.05 per share. Their top-performing division, semiconductor systems, hit $5.43 billion in sales, surpassing targets with a 10% increase from last year.
Earlier in the month, President Donald Trump applauded Applied Materials after being included in Apple’s push to manufacture more chips in the U.S. Apple plans to team up with them to boost production equipment in Austin, Texas.
Take a look at Apple and Trump’s plans for a $100 billion U.S. expansion—it’s a pretty big deal.
