Applied Materials Inc. (NASDAQ:AMAT) stock is plunging on Friday after the company reported financial results for the third quarter after market close on Thursday.
The chip equipment manufacturer reported third-quarter revenue of $7.3 billion, beating analyst estimates of $7.22 billion, with adjusted earnings of $2.48 per share, beating analyst estimates of $2.36 per share.
Outlook
“We are expecting a decline in revenue in the fourth quarter driven by both digestion of capacity in China and non-linear demand from leading-edge customers given market concentration and fab timing,” said Brice Hill, senior vice president and CFO of Applied Materials.
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“We are navigating and adapting to the near-term uncertainties by leveraging our robust supply chain, global manufacturing footprint, and deep customer relationships.”
Applied Materials expects fourth-quarter revenue of $6.7 billion, plus or minus $500 million, versus estimates of $7.33 billion.
The company expects fourth-quarter adjusted earnings to be between $1.91 and $2.31 per share, versus estimates of $2.39.
Street Opinions Split
Analyst sentiment on Applied Materials was mixed following the latest updates. UBS maintained a Neutral rating but trimmed its price target from $185 to $180, while Wells Fargo kept an Overweight stance, cutting its target from $215 to $205.
Cantor Fitzgerald also maintained an Overweight rating, lowering its target from $220 to $200. Morgan Stanley held its Equal-Weight rating but nudged its target higher from $169 to $172.
JPMorgan reiterated an Overweight view and lifted its target from $210 to $220. Stifel remained bullish with a Buy rating but reduced its target from $195 to $180, and Wolfe Research kept an Outperform rating while cutting its target from $230 to $200.
Mizuho also maintained an Outperform view, trimming its target from $220 to $200. Evercore ISI reiterated an Outperform rating and kept its $209 target unchanged. Meanwhile, Bank of America Securities downgraded the stock from Buy to Neutral and reduced its target from $190 to $180.
Price Action: AMAT stock is trading lower by 12.06% to $165.63 at last check Friday.
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