Semiconductor equipment vendor Applied Materials late Thursday beat analyst estimates for its fiscal fourth quarter and offered an outlook above views for the current period. But AMAT stock fell late on a reported U.S. criminal investigation into its exports to China.
The Santa Clara, Calif.-based company earned an adjusted $2.12 a share on sales of $6.72 billion in the quarter ended Oct. 29. Analysts polled by FactSet had expected earnings of $1.99 a share on sales of $6.52 billion. On a year-over-year basis, Applied Materials' earnings rose 4% while sales dipped a fraction.
For the current quarter, the company said it expects to earn an adjusted $1.90 a share on sales of $6.47 billion. That's based on the midpoint of its guidance. Wall Street was modeling earnings of $1.84 a share on sales of $6.38 billion in the fiscal first quarter. In the year-earlier period, Applied Materials earned an adjusted $2.03 a share on sales of $6.74 billion.
But the upbeat report was overshadowed by a Reuters report that Applied Materials is under U.S. criminal investigation for potentially evading export restrictions on China's top chipmaker, SMIC.
Sources told the news outlet that Applied Materials is being probed by the Justice Department for sending hundreds of millions of dollars of equipment to SMIC without export licenses. The U.S. has restricted shipments of advanced semiconductors and chipmaking gear to China for national security reasons.
AMAT Stock Tumbles On News Report
In after-hours trading on the stock market today, AMAT stock dropped more than 7% to 143.76. During the regular session Thursday, AMAT stock dipped 0.4% to close at 154.81.
On Nov. 10, AMAT stock broke out of a double-bottom base at a buy point of 148.40, according to IBD MarketSmith charts.
Applied Materials ranks fourth out of 27 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. AMAT stock has an IBD Composite Rating of 92 out of 99.
Further, AMAT stock is on the IBD Tech Leaders list.
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