Tags: Applied | Materials | Forecast | earnings

Applied Materials Cuts Year Full-Year Fiscal 2012 Forecast

Tuesday, 10 Jul 2012 11:51 AM

Applied Materials Inc., which makes equipment for chipmakers, cut its fiscal year profit and sales estimates because of weak demand on Tuesday.

The company said it is experiencing lower demand from foundry customers, or plants that make chips to order.

Applied Materials previously said it expected to earn 85 to 95 cents per share in the current fiscal year, but now says it could fall 15 to 20 cents per share short of that goal. Applied Materials also no longer expects to reach its revenue goal of $9.1 billion to $9.5 billion for the fiscal year ending Oct. 28.

In May, Applied Materials said it expected to reach the high end of that guidance.

Analysts, on average, were forecasting a profit of 94 cents per share, with estimates ranging from 90 cents to $1.02, according to FactSet. Wall Street was expecting $9.52 billion in revenue for the year, on average, with estimates from $9.37 billion to $9.71 billion.

Applied Material said it now expects worldwide spending on wafer fabrication equipment will be between $30 billion and $33 billion for the fiscal year, down from its previous estimate of $32 billion to $35 billion.

The company said it will update its annual guidance on Aug. 15, when it reports its third-quarter results. Applied Materials said it expects to reach only the low end of its profit and revenue estimates for the third quarter, which ends July 29. The company has forecast adjusted profit of 21 to 29 cents per share, which excludes one-time costs.

Analysts are projecting income of 25 cents per share, with estimates ranging from 23 cents to 27 cents.

Applied Materials said revenue for the quarter could be equal to its second-quarter total of $2.54 billion or could fall as much as 10 percent, suggesting a total of about $2.29 billion

Wall Street was expecting revenue of $2.43 billion, on average, with quarterly estimates ranging from $2.36 billion to $2.51 billion.

The guidance reduction follows a trend in the technology sector. Chip maker Advanced Micro Devices late Monday cut its forecast for the quarter. Hard drive makers and other tech firms have also issued profit warnings, as business spending slows around the globe.

Shares of Applied Materials lost 22 cents, or 2 percent, to $10.79 in morning trading.

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Tuesday, 10 Jul 2012 11:51 AM
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