Applied Materials Reports Weak Earnings, The Stock Is Dropping

Dow Jones2022-05-20

Applied Materials forecast less revenue than expected for the July quarter and reported earnings below expectations, citing ongoing supply-chain issues.

AMAT shares slipped 1.75% in after-hours trading. The company's key customers include Intel $(INTC)$ and Taiwan Semiconductor Manufacturing $(TSM)$.

The chip equipment maker reported adjusted earnings of $1.85 a share for the April quarter, compared with the consensus estimate of $1.90 among Wall Street analysts tracked by FactSet. Revenue came in at $6.25 billion, which was slightly below analysts' expectations of $6.349 billion.

Management's financial outlook was also downbeat. Applied Materials forecast a range of potential revenue for the current quarter with a midpoint of $6.25 billion, compared with the consensus view of $6.682 billion.

Wall Street analysts are generally positive on Applied Materials stock. About 85% have ratings of Buy or the equivalent, while 15% have Hold ratings on the shares, according to FactSet.

The company's shares have declined by 30% this year, compared with the 27% drop for the iShares Semiconductor ETF $(SOXX)$, which tracks the performance of the ICE Semiconductor Index.

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