(Reuters) -Chip tools maker Applied Materials Inc (NASDAQ:AMAT) forecast first-quarter revenue above market estimates on Thursday, on hopes that easing supply chain constraints will help it meet pent up demand from chipmakers ramping up production.
Shares of the Santa Clara, California-based company rose nearly 3% in trading after the bell.
Even though the wider chip industry is seeing sluggish demand for consumer electronics like PCs and smart phones, the growing adoption of 5G and shift to hybrid work still remains positive.
Moreover, Applied is also set to benefit from a U.S. push to cut dependency on China and ramp up domestic chip output, prompting chipmakers like Intel Corp (NASDAQ:INTC) and Taiwan Semiconductor Manufacturing to announce plans for new plants.
The company posted revenue of $6.75 billion for the fourth quarter ended Oct. 30, compared to analysts' average expectation of $6.45 billion, according to Refinitiv IBES data.
Chief Executive Gary Dickerson said that the company is slowing the "rate of spending growth in the near term amid geopolitical and macroeconomic challenges."
The company forecast current-quarter revenue of $6.70 billion, plus or minus $400 million, compared with analysts' average estimate of $6.45 billion.
Applied said the outlook includes expected impact of recently announced U.S. export regulations and ongoing supply chain challenges.
Earlier in October, the company said export restrictions to China would result in a $250 million-$550 million loss in net sales in the quarter ending Oct. 30, with a similar impact expected in the following three months.
Excluding items, the company earned $2.03 per share, beating estimates of $1.73 per share.