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: Applied Materials stock gains after earnings show record revenue


Applied Materials Inc. shares gained in late trading Wednesday, after the semiconductor-equipment manufacturer reported record sales amid a global chip shortage and gave a revenue forecast that met expectations.

Applied Materials

reported fiscal first-quarter earnings of $1.79 billion, or $2 a share, on record sales of $6.27 billion, up from $5.16 billion a year ago. After adjusting for certain income-tax effects and other factors, the chip-equipment company reported earnings of $1.89 a share, up from $1.39 a share a year ago.

Analysts on average expected adjusted earnings of $1.86 a share on sales of $6.19 billion, according to FactSet. Shares increased more than 2% in after-hours trading Wednesday, after closing with a 0.8% gain at $140.96.

Chip-equipment suppliers’ shares have moved more in reaction to their forecasts than their results this quarter, as Applied Materials rivals such as Lam Research Corp.

and KLA Corp.

have issued disappointing guidance amid supply-chain issues. The companies have had trouble sourcing the chips they need to build the machines that help manufacture chips amid a global semiconductor shortage, leading to concerns about the ability to complete and ship their products, especially in the first half of this year.

“This issue has become an industrywide concern, and Applied is not immune to it,” Stifel analysts wrote in a preview of the report. “In fact, given its scale and size, Applied has many moving parts that likely make its supply-chain and procurement capabilities more complex than other companies.”

Applied Materials missed a bit with the midpoint of its earnings forecast, but presented stronger sales guidance. Executives guided for fiscal second-quarter adjusted earnings of $1.75 to $2.05 a share on sales of $6.05 billion to $6.65 billion Wednesday, while analysts on average were expecting $1.94 a share on revenue of $6.37 billion. Those expectations had decreased slightly in recent weeks, showing the effects of guidance from rivals.

“While the supply environment remains challenging, Applied Materials is doing everything we can to deliver for our customers and we recorded our highest-ever quarterly revenues,” Chief Executive Gary Dickerson said in a statement. “Our outlook for 2022 and beyond is very positive as long-term secular trends drive our markets structurally higher and Applied’s broad technology portfolio puts us in a great position to capture a larger portion of our served markets.”

Applied Materials shares have also come down in response to other chip-equipment companies’ disappointing forecasts, falling 10.4% in the past three months, more than double the 4.9% decline of the S&P 500 index

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