Applied Materials, Inc. announced its third-quarter results, revealing a profit increase for Q3. However, the company also issued a bleak outlook for sales and profits in Q4, which has renewed concerns that the U.S.-China trade dispute is affecting demand.
America’s largest producer of chipmaking materials projected Q4 revenue of approximately $6.7 billion, reducing its previous estimate of $7.32 billion.
In Q3, revenue rose 7.7% to $7.3 billion, surpassing analysts’ expectations of $7.21 billion.
Gary Dickerson, President and CEO of Applied Materials told investors, “We are currently operating in a dynamic macroeconomic and policy environment, which is creating increased uncertainty and lower visibility in the near term, including for our China business. Despite this, we remain very confident in the longer-term growth opportunities for the semiconductor industry and Applied Materials.”
Brice Hill, Senior Vice President and CFO of Applied Materials stated, “We are expecting a decline in revenue in the fourth quarter driven by both digestion of capacity in China and non-linear demand from leading-edge customers given market concentration and fab timing. We are navigating and adapting to the near-term uncertainties by leveraging our robust supply chain, global manufacturing footprint and deep customer relationships.”
In an interview following the release, Dickerson said the company is experiencing less demand from customers in China where it also faces delays in approval for exporting technology. “It just creates a level of uncertainty,” he concluded.
Following the announcement, Applied Materials shares dropped as much as 15%.
By CEO NA Editorial Staff
