Nov 18 (Reuters) - Applied Materials Inc forecast
first-quarter sales and profit below market estimates on
Thursday, as chip shortages slowed the supply chain of the
world's biggest maker of tools for making chips.
The forecast sent its shares down nearly 6.7% in extended
Applied, which makes machines used to manufacture
semiconductors and other high-tech components, expects
current-quarter net sales of $6.16 billion, plus or minus $250
million, compared with analysts' estimates of $6.50 billion,
according to Refinitiv IBES data.
On a conference call with investors, Chief Executive Gary
Dickerson said demand remained strong and that Applied's
fourth-quarter sales would have been $300 million higher without
supply constraints, which he said will persist into the
company's fiscal 2022.
"I'm engaged with a number of these tech CEOs resolving the
supply chain issues, which I've never done in my entire career,
not anywhere near to this degree," Dickerson told Reuters in an
Chief Financial Officer Bob Halliday said about 10
components out of the thousands used in Applied's machines had
caused its supply chain problems and the company expects supply
issues to get better each quarter through its fiscal 2022.
"It is one of the main suppliers that enables you to build
more chips, so it's kind of a Catch 22," D.A. Davidson & Company
analyst Thomas Diffely said. "They need chips to put in their
systems to build more chips."
Chipmakers are ramping up output and buying new tools as the
world shifts to 5G and consumers upgrade their phones, laptops
and gaming consoles. The broader shift to remote work and
learning during the pandemic has also powered demand for chips.
Applied, which counts top chipmakers such as Intel Corp
and Taiwan Semiconductor Manufacturing Co Ltd
as its customers, also forecast adjusted earnings between $1.78
and $1.92 per share, compared with estimates of $2.01 per share.
For the fourth quarter, the company's sales rose 31% to
$6.12 billion, below estimates of $6.35 billion. On an adjusted
basis, the company earned $1.94 per share, a cent short of
expectations, according to Refinitiv data.
(Reporting by Nivedita Balu in Bengaluru and Stephen Nellis in
San Francisco; Editing by Devika Syamnath, Jonathan Oatis and