What's Dragging Applied Materials Down

When Applied Materials Inc. (NASDAQ: AMAT) reported its fiscal fourth-quarter financial results late Thursday, it seemed to be suffering from the same problem as Nvidia. While this quarter was fairly positive, the outlook is what dragged the shares down, although not to the degree that Nvidia saw.

Applied Materials said that it had $0.97 in earnings per share (EPS) and $4.01 billion in revenue, compared with consensus estimates that called for $0.97 in EPS and $4.0 billion in revenue for the fourth quarter. The same period from last year reportedly had EPS of $0.93 on $3.97 billion in revenue.

In terms of its segments the company reported as follows:

  • Semiconductor systems revenue decreased 5.0% year over year to $2.31 billion.
  • Applied Global Services increased 17.6% to $977 million.
  • Display and Adjacent Markets increased 3.7% to $702 million.

Looking ahead to the fiscal first quarter, the company expects to see EPS in the range of $0.75 to $0.83 and revenues between $3.56 billion and $3.86 billion. Consensus estimates call for $0.92 in EPS and $3.94 billion in revenue.

Gary Dickerson, president and CEO, commented:

In fiscal 2018, each of Applied’s major businesses delivered double-digit growth despite challenging conditions in the second half of the year. While near-term market headwinds remain, overall industry spending remains robust, and we are focused on positioning Applied Materials for the long term, expanding our role in the A.I.-Big Data era and winning the major technology inflections ahead..

Shares of Applied Materials were last seen down 1.6% at $34.45 on Friday, with a consensus analyst price target of $54.59 and a 52-week trading range of $30.53 to $62.40.