Categories AlphaGraphs, Earnings, Technology

Applied Materials Q3 profit dips 44% but beats estimates

Applied Materials (NASDAQ: AMAT) reported a 44% dip in earnings for the third quarter as weak performance from all the three segments hurt net sales. However, the results exceeded analysts’ expectations. Further, the chip equipment maker guided fourth-quarter revenue and earnings within the consensus estimates range.

Net income plunged by 44% to $571 million or $0.61 per share. Adjusted earnings decreased by 29% to $0.74 per share. Net sales dropped by 14% to $3.56 billion.

Looking ahead into the fourth quarter, the company expects net sales to be about $3.685 billion, plus or minus $150 million. Adjusted earnings are anticipated to be in the range of $0.72 to $0.80 per share.

Applied Materials Q3 profit dips 44% but beats estimates

Applied Materials is fully funding its research and development programs to develop new products and capabilities that will accelerate customers’ roadmaps and underpin its growth in the years ahead.

During the third quarter, sales declined in the all the three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. From a geography perspective, the double-digit sales growth in the US and Taiwan were hampered by weak sales from other regions.

The company has been struggling in the challenging market environment. Applied Materials gets majority of the revenue contribution from Asia Pacific region, with China being a significant benefactor. However, the trade war between the US and China turned out to be a major headwind in the contribution from China.

Read: Sina Q2 earnings preview

For the second quarter, the company reported a 41% dip in adjusted earnings due to a 23% drop in the top line. The weak industry macros resulted in a muted performance of its semiconductor and display segments.

Also Read:  Walt Disney (DIS) beats Q1 revenue and earnings estimates

At the conference call, investors expect the company’s management to focus on the purchase of Kokusai Electric from Kohlberg Kravis Roberts (KKR) for $2.2 billion. Applied Materials is likely to stand beneficial from Kokusai’s wafer equipments that are helpful in processing chips which will be used for self-driving cars, 5G network deployment, Internet of Things (IoT), and artificial intelligence.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.

Most Popular

Wayfair (W) stock looks less attractive despite low price, thanks to market selloff

Shareholders of online furniture retailer Wayfair Inc. (NYSE: W) have been speculating about their returns for long, with the stock not making any meaningful gains in the past several months.

Here’s how Chewy (CHWY) held its ground in a COVID-19 world

Shares of Chewy Inc. (NYSE: CHWY) were down 6% in afternoon hours on Friday, a day after the company reported a narrower-than-expected loss and sales that matched estimates for its

What to look for when Levi Strauss (LEVI) reports Q1 earnings on April 7

Levi Strauss & Co. (NYSE: LEVI) is slated to report its first-quarter 2020 earnings results on Tuesday, April 7, after the market closes. The bottom line will be impacted by