Applied Materials Issues Bullish Revenue Forecast Despite Supply-Chain Challenges

Applied Materials said it expects fiscal fourth-quarter revenue of about $6.65 billion. (Photographer: David Paul Morris/Bloomberg)

Shares of



Applied Materials

were edging higher after the semiconductor-equipment maker said it expects fiscal-fourth quarter revenue of about $6.65 billion, higher than Wall Street estimates.



Applied Materials

(ticker: AMAT) rose 0.5% to $108.82 in premarket trading Friday. Coming into the session, the stock has declined 31% this year.

The company said it expects adjusted earnings in the fourth quarter of between $1.82 and $2.18 a share. Applied Materials said its forecast “includes the expected impact of ongoing supply-chain challenges.”

Applied Materials cited those challenges in its third-quarter earnings report, where it posted adjusted profit of $1.94 a share, topping estimates of $1.79. Sales rose 5.2% to $6.52 billion and also beat forecasts. Gross margin in the quarter on an adjusted basis was 46.2% vs. 48% a year earlier.

“Applied Materials delivered record quarterly revenue, yet ongoing supply chain challenges constrained our ability to meet demand, and our top priority remains increasing shipments to our customers,” said Gary Dickerson, chief executive and president. “We feel confident in our ability to navigate macroeconomic headwinds and remain very positive about the long-term strength of the semiconductor market and our outsized growth opportunities.”

Dickerson told analysts and investors on the company’s conference call that Applied Materials would be slowing down hiring “while ensuring we fully fund the R&D programs and strategic operational capabilities that support our long-term growth.”

Analysts at KeyBanc maintained their Sector Weight rating on the stock, saying they expect “flattening revenue at a high level, and in the absence of growthdriving margin expansion could be difficult.”

Shares of peer



Intel

(INTC) fell 0.7% in premarket trading, while



Micron Technology

(MU) was rising 1.4%.

Write to Joe Woelfel at joseph.woelfel@barrons.com

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