Applied Materials Lowers Year View as Demand from Foundry Customers Weakens

Date : 07/10/2012 @ 10:10AM
Source : Dow Jones News
Stock : Advanced Micro Devices, Inc. (MM) (AMD)
Quote : 10.98  0.0 (0.00%) @ 6:45AM

Applied Materials Lowers Year View as Demand from Foundry Customers Weakens

Applied Materials, Inc. (MM) (NASDAQ:AMAT)
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   By Victoria Stilwell 
 

Applied Materials Inc. (AMAT) lowered its full-year guidance to reflect weaker-than-expected demand in its semiconductor business among its foundry customers.

Shares were recently trading about 2% lower at $10.81 as the company warned it expects to fall short of its previous revenue prediction of $9.1 billion to $9.5 billion and adjusted per-share earnings of 85 cents to 95 cents for the year ending Oct. 28.

The company said demand changes could have a impact of 15 cents a share to 20 cents a share on its full-year adjusted earnings. The company will provide a new target range during its Aug. 15 earnings call.

The company also lowered its 2012 industry forecast for wafer fab equipment spending to a range of $30 billion to $33 billion, down from its earlier expectation of $32 billion to $35 billion.

Applied Materials is the largest provider of machines used in making semiconductors, solar panels and displays. The company has broadened its business to include tools used in making solar panels and displays used in computers and TV sets.

Supply gluts for manufacturers in those businesses have slowed plans to boost production capacity in the past year and have hurt Applied Materials' results. The company in May reported its fiscal second-quarter profit shrank 41% as the its margins narrowed, though revenue dropped less than expected.

The revision follows Advanced Micro Devices Inc.'s (AMD) lowered revenue expectations for the recently ended second quarter amid smller-than-expected sales in China and Europe. AMD said demand for semiconductors has been shaky this year amid global economic woes, and weaker consumer spending has also impacted second-quarter sales.

Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com

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