Semiconductor equipment vendor Applied Materials late Thursday crushed Wall Street's targets for its fiscal fourth quarter and guided much higher than views for the current period. AMAT stock rose in extended trading.
The Santa Clara, Calif.-based company earned an adjusted $2.03 a share on sales of $6.75 billion in the quarter ended Oct. 30. Analysts polled by FactSet had predicted earnings of $1.73 a share on sales of $6.45 billion. On a year-over-year basis, Applied Materials earnings increased 5% while sales rose 10%.
On Oct. 12, Applied Materials warned investors that new U.S. trade restrictions on the sale of semiconductor products in China would reduce its fiscal Q4 sales by about $400 million, plus or minus $150 million. As a result, it lowered its sales and earnings outlook for the period.
For the current quarter, Applied Materials forecast adjusted earnings of $1.93 a share on sales of $6.7 billion. That's based on the midpoint of its outlook. Wall Street was modeling earnings of $1.77 a share on sales of $6.35 billion in the company's fiscal first quarter.
AMAT Stock Rises After Report
In after-hours trading on the stock market today, AMAT stock advanced 0.8% to 105.23. During the regular session Thursday, AMAT stock rose 0.2% to close at 104.45.
"Applied Materials delivered a strong finish to our fiscal year with record performance, and we remain focused on mitigating supply chain constraints and doing everything possible to meet customer demand," Chief Executive Gary Dickerson said in a news release.
He added, "Though we are slowing the rate of spending growth in the near term amid geopolitical and macroeconomic challenges, we are making the strategic investments to win the major technology inflections that will enable Applied to outgrow the semiconductor market."
AMAT stock ranks No. 13 out of 29 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. It has a middling IBD Composite Rating of 65 out of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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