Applied Materials blames supply-chain problems for earnings and forecast miss, stock drops from record high – MarketWatch

Applied Materials Inc. stock sank from a record high in after-hours trading Thursday, after the company’s record-breaking year ended with underwhelming profit and revenue totals.

The maker of chip-manufacturing equipment cited supply-chain woes for posting quarterly revenue that was on the low end of its guidance, and said it expects the issues to also affect the current quarter’s results. Applied Materials

shares fell as much as 8% after hours, after rising about 1.8% in the regular session to close at $158.74. 

The maker of chip-manufacturing equipment said fiscal fourth-quarter revenue rose to $6.12 billion from $4.69 billion in the year-ago quarter. It posted net income of $1.71 billion, or $1.89 a share, compared with $1.13 billion, or $1.23 a share, in the year-ago period. Adjusted for stock-based compensation, depreciation and amortization, deferred income taxes and more, earnings came in at $1.94 a share.

Analysts surveyed by FactSet had forecast adjusted earnings of $1.96 a share on revenue of $6.39 billion.

Applied Materials expects first-quarter earnings of $2.01 a share on revenue of $6.16 billion, while analysts had forecast $2.01 a share on revenue of $6.5 billion.

Applied Materials had been experiencing strong gains amid a shortage affecting the entire semiconductor industry, leading many chip makers to increase plans for manufacturing with the company’s equipment. For the full year, Applied Materials reported record net income of $5.89 billion, or $6.40 a share, and record revenue of $23.06 billion, an increase of 34% from the previous fiscal year.

Because of the fourth-quarter miss, though, the annual numbers fell short of analysts’ estimates of $23.31 billion in revenue and $6.32 billion in income, or $6.44 a share.

The Silicon Valley-based company’s stock has risen almost 84% so far this year, while the S&P 500 Index

has climbed about 25% year to date. Shares closed at an all-time record Thursday before the report.

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