By Senad Karaahmetovic
Shares of Applied Materials (NASDAQ:AMAT) are down over 1% in pre-open Friday after the company delivered results that trailed analyst expectations.
AMAT delivered EPS of $1.85 to miss on the consensus of $1.91. Revenue came in at $6.25 billion, again lower than the $6.36 billion expected. Adjusted gross margin was reported at 47% vs. 47.7% y/y, and compared to the estimate of 47.1%.
For this quarter, the company is calling for an adjusted EPS of $1.59 to $1.95, lower than the estimate of $2.05. Net sales are seen between $5.85 billion and $6.65 billion, “which includes the expected impact of ongoing supply chain challenges.”
Stifel analyst Patrick Ho commented:
“Demand trends remain healthy, and the company’s visibility now extends well into 2023 and even 2024. In fact, management noted that it expects equipment spending to be “higher” in 2023 versus 2022. In total, we believe the supply chain/COVID issue will continue to linger but overall demand has not slowed and we do not expect it to slow. Our long-term thesis also remains intact.”
Mizuho analyst Vijay Rakesh cut the price target to $160.00 per share from $180.00 but continues “to see AMAT well positioned with a strong product roadmap and market leadership despite near-term headwinds.”