) lowered its sales and earnings guidance for full-year 2012.
Following the news, the shares fell 2.72% to $10.71 after the
market closed yesterday.
The chip-fab equipment maker expects full-year net sales and
adjusted earnings to be below the previous forecast of $9.1-$9.5
billion and 85-95 cents, respectively. Though management did not
provide any explicit new guidance range, it did mention that
full-year earnings could go down by 15 cents to 20 cents due to
Additionally, management now expects worldwide spending on wafer
fabrication equipment (WFE) in the range of $30-$33 billion, down
from its previous estimate of $32-$35 billion.
According to the market research firm, Gartner, WFE spending
will total $33 billion in 2012, down 8.9% from 2011. But it will
increase in 2013 to more than $35.4 billion, up 7.4% from 2012.
Management said that the guidance cut was on account of
lower-than-expected demand in its semiconductor equipment business,
primarily among foundry customers.
For the upcoming third quarter, the company expects earnings on
the lower end of the previously announced guidance range of 21
cents to 29 cents per share.
Applied Materials is the global leader in providing
manufacturing solutions for the semiconductor, display and solar
industries, and we remain positive about its strong position in the
semiconductor market. In the second quarter, Applied posted decent
numbers, with both revenue and earnings surpassing our
The company is expected to update its annual sales and earnings
guidance on August 15, when it reports its third quarter
This marks yet another guidance reduction in the semiconductor
industry. Recently, chip maker
Advanced Micro Devices
) slashed its sales forecast for the second quarter due to
weaker-than-expected sales in China and Europe. Advanced Micro's
shares fell 11.2% to $4.99 following the guidance revision.
Applied, which competes with other large equipment makers, such
Lam Research Corp.
), holds a Zacks #3 Rank that translates into a short-term Hold
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