It was kicked out of my portfolio today with a minimal plus - the forecasts are too gloomy for me to continue holding it.
I have about 2.5k in free capital - I'll park on the sidelines for now.
Applied Materials Inc reported adjusted earnings of 2.38 dollars per share for the quarter ended January 31, up from 2.13 dollars per share in the same quarter last year.
The average expectation of twenty-five analysts for the quarter was earnings of 2.29 dollars per share.
Wall Street was expecting earnings of between 2.19 and 2.34 dollars per share.
- Sales rose by 6.8 percent year-on-year to 7.17 billion dollars; analysts had expected 7.14 billion dollars.
- The EPS reported by Applied Materials Inc. for the quarter amounted to 1.45 dollars.
- The company reported a quarterly net profit of 1.19 billion dollars.
Applied Materials on Thursday forecast second quarter sales below market estimates.
The company expects escalating geopolitical tensions and weak demand for memory chips for consumer electronics to hurt sales of its chipmaking equipment.
Shares of the company - the largest US semiconductor manufacturer - fell almost 5% in extended trading.
Sales in China, Applied's biggest market in the first quarter, are at risk from tighter U.S. restrictions on chipmaking technology exports.
The US government said in December that new controls will be imposed on the export of semiconductor manufacturing equipment ((link)) needed to make advanced-node chips to China, affecting Applied Materials.
Applied Materials forecast second-quarter revenue of about $7.1 billion, plus or minus $400 million, compared with analysts' average estimate of $7.21 billion, according to data compiled by LSEG.
In the current quarter, the company will "factor in export control-related headwinds," Chief Financial Officer Brice Hill said in a statement.
Sales to China accounted for about 31 percent of Applied Materials' total sales in the first quarter, down from about 45 percent of total sales in the year-ago period.
On Thursday, U.S. President Donald Trump tasked his economic team with developing a plan to impose reciprocal tariffs (link) on all countries that impose tariffs on U.S. imports, targeting China, Japan and South Korea - some of Applied Materials' largest markets.
Weakness in the market for memory chips used in smartphones and PCs has also offset the positive impact of rising demand for advanced chips capable of processing the vast amounts of data used by generative AI.
Memory chip maker SK Hynix told analysts last month that its capital expenditure for 2025 (link) will increase only slightly year-on-year.
Applied expects second-quarter adjusted earnings of $2.30 per share, plus or minus 18 cents, in line with estimates of $2.30 per share.
For the quarter ended Jan. 26, Applied Materials reported revenue of $7.17 billion, beating the consensus estimate of $7.14 billion. Adjusted earnings of 2.38 dollars per share were also above estimates of 2.29 dollars.
