Applied Components, the world’s largest supplier of equipment used to make chips, predict current-quarter profit and revenue below Wall Street estimates, joining to fears that a two-year chip boom may be losing steam.
Pieces of the company, whose results are seen as the bellwether for the chip industry, were down 4 percent at $45.55 in perpetuated trading on Thursday. Rival Lam Research also dropped about 2 percent.
Investors be enduring worried that slowing smartphone growth and newer technologies wish prompt chipmakers to rein in capital spending and lower demand for chip-making tackle.
“As foundry customers optimize existing capacity, they have hemmed their capital spending plans for the year,” Chief Executive Office-bearer Gary Dickerson told analysts on a post-earnings call.
Adding to the pesters, NAND flash memory chip prices have nearly halved from a top out in 2017.
Morningstar analyst Abhinav Davuluri said he expects relatively dimmer spending in 2019 for memory, resulting in modest declines in overall gear spending.
Dickerson said the fourth-quarter forecast assumes a decline of round 4 percent in the company’s semiconductor systems revenue.
Applied Materials requires fourth-quarter adjusted profit of between 92 cents and $1 per division and net sales of between $3.85 billion and $4.15 billion. The midpoint of the gross income range forecast would be about flat from a year earlier, the circle said.
Analysts on average were expecting a profit of $1.17 per quota and revenue of $4.46 billion, according to Thomson Reuters I/B/E/S.
The company’s purchasers include Samsung Electronics, Micron Technologies, Taiwan Semiconductor, and Intel.
Samsung accounted for in 23 percent of Applied Materials’ revenue in fiscal year 2017.
The wishy-washy forecast clouded yet another quarterly beat on revenue and profit by Santa Clara, California-based Tended Materials.
The company’s net income jumped about 27 percent to $1.17 billion in the third residence ended July 29, while total net sales rose 19 percent to $4.47 billion.
Excluding jottings, the company earned $1.20 per share.
Analysts on average had expected a profit of $1.17 per deal and revenue of $4.43 billion.
Applied Materials’ also topped analysts’ values for revenue growth in its semiconductor and display businesses.
Sales in the semiconductor upset rose 8.5 percent to $2.75 billion, slightly ahead of FactSet appraises of $2.74 billion.
Revenue in its display business surged 80.7 percent to $741 million, also unaffected by FactSet estimates of $722.1 million. The division makes flat panel publicizes for televisions, PCs and smartphones.