Applied Materials forecasts dismal current quarter as supply chain issues persist

Photo of Applied Materials’ new corporate signage in Santa Clara, California, United States is shown in this image posted August 22, 2016. Courtesy of Applied Materials/Handout via REUTERS

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May 19 (Reuters) – Applied Materials (AMAT.O) forecast third-quarter revenue and profit below estimates, reporting that supply bottlenecks, exacerbated by COVID-19 lockdowns in China, would hamper its ability to meet demand for its chipmaking tools.

A shortage of semiconductors and parts for the machines used to produce chips has put pressure on the wider chip supply chain, which is already facing more demand than chipmakers are able to. to satisfy.

“We expect our ability to meet this demand to remain constrained by current near-term supply chain challenges with incremental improvements beginning in our fourth quarter,” chief executive Gary Dickerson told a conference call. telephone on Thursday.

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Applied Materials estimates current quarter revenue at $6.25 billion, plus or minus $400 million. Analysts on average expect revenue of $6.73 billion, according to data from Refinitiv IBES.

“There has been weak consumer demand for products such as smartphones, PCs and TVs. As a result, demand for display equipment has weakened and we are making adjustments to our outlook for revenue,” said chief financial officer Brice Hill.

Sales in its display segment and adjacent markets rose 1.6% to $385 million in the quarter ended May 1.

The company expects adjusted earnings to be between $1.59 and $1.95 per share in the third quarter, below estimates of $2.04.

For the second quarter, the company reported adjusted earnings per share of $1.85 and revenue of $6.25 billion, both below Wall Street estimates.

Shares of the Santa Clara, Calif.-based company fell 1.7% in extended trading.

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Reporting by Chavi Mehta and Eva Mathews in Bengaluru; Editing by Amy Caren Daniel

Our standards: The Thomson Reuters Trust Principles.

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