Applied Materials forecasts gloomy current quarter as supply chain woes persist

Utilized Supplies’ new company signage picture in Santa Clara, California, U.S. is proven on this picture launched on August 22, 2016. Courtesy Utilized Supplies/Handout through REUTERS

Might 19 (Reuters) – Utilized Supplies (AMAT.O) forecast third-quarter income and revenue beneath estimates, signaling that offer bottlenecks, exacerbated by the COVID-19 lockdowns in China, would hamper its capability to satisfy demand for its chipmaking instruments.

A semiconductor and components scarcity for machines used to provide chips has been pressuring the broader chip provide chain that’s already going through extra demand than chipmakers are capable of meet.

“We anticipate our capability to meet this demand will stay constrained by ongoing provide chain challenges within the close to time period with incremental enhancements starting in our fourth quarter,” mentioned Chief Government Officer Gary Dickerson in an earnings name on Thursday.

Utilized Supplies estimates current-quarter income of $6.25 billion, plus or minus $400 million. Analysts on common count on income of $6.73 billion, in line with Refinitiv IBES knowledge.

“There was weak point in client demand for merchandise like smartphones, PCs and TVs. Because of this, show gear demand has softened and we’re making changes to our income outlook,” mentioned Chief Monetary Officer Brice Hill.

Gross sales in its show and adjoining markets section rose 1.6% to $385 million within the quarter ended Might 1.

The corporate expects adjusted revenue to be within the vary of $1.59 to $1.95 per share within the third quarter, beneath estimates of $2.04.

For the second quarter, the corporate reported adjusted revenue per share of $1.85 and income of $6.25 billion, each of which fell in need of Wall Avenue estimates.

Shares of the Santa Clara, California-based firm fell 1.7% in prolonged buying and selling.

Reporting by Chavi Mehta and Eva Mathews in Bengaluru; Modifying by Amy Caren Daniel

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