Applied Materials Gives Bullish Forecast in Face of ‘Headwinds’

Applied Materials said it can weather the economic downturn and give an upbeat sales forecast.

In the fourth quarter of the fiscal year, revenue is expected to be $6.65 billion. The analysts estimated $6.55 billion. Excluding certain items, profit will be up to $2.18 a share, compared with an average prediction of $1.94.

The outlook shows that the industry may be doing better than thought. The market is sliding into a slump due to too much inventory and weak demand for electronic devices, and investors are worried. The budgets for new plants and equipment have been slashed by large Applied Materials customers.

The stock rose in extended trading. Through Thursday, Applied Materials shares had fallen by a third this year.

There is a boom and a recession.

The industry used to be concerned about getting its products through the supply chain. The ability to fill orders has been constrained by shortages according to Applied Materials.

The company is optimistic about the industry despite the challenges.

Gary Dickerson said that the company's top priority was increasing shipments to their customers. The long-term strength of the Semiconductor market and our outsized growth opportunities are very positive for us.

The third quarter's earnings were $1.94 a share. That was lower than a prediction of 1.79 The $6.26 billion projection was beaten by $6.2 billion in sales.

Applied Materials machines are vital to the process of making semiconductors and are at the heart of factories operated by companies such as Intel and Taiwan Semiconductor Manufacturing Co.

Dickerson believes that the industry's dependence on personal computers and cellphones is being lessened by the use of new types of devices. It may be able to avoid the ups and downs it has experienced in the past. His thesis is being put to the test as phone demand slows and PC demand falls off.