By Nivedita Balu and Stephen Nellis
(Reuters) – Applied Materials Inc forecast first-quarter sales and profit below market estimates on Thursday, as chip shortages slowed the supply chain of the world’s biggest maker of tools for making chips.
The forecast sent its shares down nearly 6.7% in extended trading.
Applied, which makes machines used to manufacture semiconductors and other high-tech components, expects current-quarter net sales of $6.16 billion, plus or minus $250 million, compared with analysts’ estimates of $6.50 billion, according to Refinitiv IBES data.
In a statement, Chief Executive Gary Dickerson said demand remained strong but that Applied is struggling to procure enough chips that power its complex chipmaking machines.
“Our supply chain cannot keep up,” Dickerson said in a statement. “We expect supply shortages of certain silicon components to persist in the near-term.”
Chipmakers are ramping up output and buying new tools as the world shifts to 5G and consumers upgrade their phones, laptops and gaming consoles. The broader shift to remote work and learning during the pandemic has also powered demand for chips.
Applied, which counts top chipmakers such as Intel Corp and Taiwan Semiconductor Manufacturing Co Ltd as its customers, also forecast adjusted earnings between $1.78 and $1.92 per share, compared with estimates of $2.01 per share.
For the fourth quarter, the company’s sales rose 31% to $6.12 billion, below estimates of $6.35 billion. On an adjusted basis, the company earned $1.94 per share, a cent short of expectations, according to Refinitiv data.
(Reporting by Nivedita Balu in Bengaluru and Stephen Nellis in San Francisco; Editing by Devika Syamnath and Jonathan Oatis)
