Chip tools maker Applied Materials Inc on Thursday forecasted first-quarter revenue above market estimates, in hopes that easing supply chain constraints will help it meet pent-up demand from chipmakers ramping up production.
The company's results come at a time when the wider chip industry is seeing sluggish demand for consumer electronics like PCs and smartphones, with chipmakers like Intel Corp and Advanced Micro Devices Inc providing a weak outlook.
"Applied's performance reflects the past strength in semiconductor demand where industry capacity was unable to fulfill demand," said Kinngai Chan, an analyst at Summit Insights Group, adding that the existing strong backlog continues to drive near-term financial performance for the company.
Shares of the Santa Clara, California-based company, which have slumped about 33 percent so far this year, rose 3 percent in trading after the bell.
However, Chief Executive Gary Dickerson said that the company is slowing the "rate of spending growth in the near term amid geopolitical and macroeconomic challenges".
The Covid-19 lockdowns in China earlier this year against the backdrop of rising costs have also prompted chipmakers like Intel and Taiwan Semiconductor Manufacturing Corporation – some of the biggest customers of Applied – to cut spending.
Applied posted revenue of US$6.75 billion (S$9.27 billion) for the fourth quarter that ended October 30, compared to analysts' average expectation of US$6.45 billion, according to Refinitiv IBES data.
The company sees current-quarter revenue of US$6.70 billion, plus or minus US$400 million, compared with analysts' average estimate of US$6.45 billion.
Applied said the outlook includes an expected impact of the recently announced US export regulations and ongoing supply chain challenges.
CEO Dickerson, during an earnings call, said the company is estimating that the unmitigated impact to its fiscal 2023 revenues due to the export curb could be up to US$2.5 billion.
Excluding items, Applied earned US$2.03 per share in the reported quarter, beating estimates of US$1.73 per share.
