By Stephen Nellis and Eva Mathews

Applied Materials Inc forecasted current quarter sales above market estimates on Thursday, on demand for its semiconductor manufacturing tools from chipmakers rushing to increase capacity amid shortages global.

A boom in sales of laptops, game consoles and personal vehicles spurred by a pandemic has forced automakers to compete with the consumer electronics industry for supplies of scarce chips, increasing orders for Applied Materials chip factory tools.

Stocks were mostly flat in after-hours trading.

The company said it expected net sales of $ 6.33 billion for the current quarter, plus or minus $ 250 million, compared to analysts’ estimates of $ 6.04 billion. dollars, according to data from Refinitiv IBES.

It also reported a 41% increase in sales to $ 6.2 billion for the third quarter, ended Aug. 1.

Profits more than doubled to $ 1.72 billion, or $ 1.87 per share, in the quarter, from $ 841 million, or 91 cents per share, a year earlier.

Excluding items, the company gained $ 1.90 per share, beating the average analyst estimate of $ 1.77, according to data from Refinitiv.

The company’s semiconductor systems business, which contains most of its tool sales, had revenue of $ 4.45 billion, the highest on record for the segment and higher than Analysts’ estimates of $ 4.27 billion, according to FactSet data. Applied said that only about half of the revenue from chip computing tools came from equipment used for advanced chips. The rest were from tools that were once thought to be legacy tools used to make older styles of chips.

But in recent years, these tools have found new sensors and radio chips that help connect devices to wireless networks. Everyday things, from traffic lights to factory machines, are now connected to data centers, where their performance is analyzed and optimized.

“It’s a massive transformation of every industry that’s going to happen. Semiconductors are the foundation of it,” Managing Director Gary Dickerson told Reuters in an interview.

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