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APPLIED MATERIALS, INC.

(AMAT)
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Applied Materials sales forecast misses estimates on supply chain woes

11/18/2021 | 04:10pm EST

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 trading.

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 interview.

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 Richard Pullin)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
APPLIED MATERIALS, INC. 1.77% 132.45 Delayed Quote.-15.83%
INTEL CORPORATION -0.67% 47.73 Delayed Quote.-7.32%
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED -0.78% 636 End-of-day quote.3.41%
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Financials (USD)
Sales 2022 26 538 M - -
Net income 2022 7 248 M - -
Net cash 2022 1 064 M - -
P/E ratio 2022 16,4x
Yield 2022 0,76%
Capitalization 118 B 118 B -
EV / Sales 2022 4,39x
EV / Sales 2023 4,09x
Nbr of Employees 27 000
Free-Float 44,1%
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Mean consensus OUTPERFORM
Number of Analysts 31
Last Close Price 132,45 $
Average target price 171,75 $
Spread / Average Target 29,7%
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Managers and Directors
Gary E. Dickerson President, Chief Executive Officer & Director
Robert J. Halliday Chief Financial Officer & Senior Vice President
Thomas J. Iannotti Chairman
Omkaram Nalamasu Chief Technology Officer & Senior Vice President
Jay O. Kerley Chief Information Officer & Senior Vice President
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