Applied Materials Stock Drops 15% on Weak Outlook, Trade Concerns

Applied Materials, the largest semiconductor equipment manufacturer in the United States, has reported a disappointing outlook for its fiscal quarter ending October 31, leading to a significant drop in its stock price after hours. The company projected revenue of approximately 67 billion dollars for the quarter, falling short of the average analyst estimate of 73.2 billion dollars. Additionally, the company forecasted earnings per share of 2.11 dollars, excluding certain items, which is also below the analyst estimate of 2.38 dollars. This underperformance has raised concerns about the impact of trade disputes on demand.

The company's chief executive officer stated that demand from certain customers is decreasing, and there are delays in approvals for technology exports. Furthermore, the prolonged trade negotiations and other economic factors have prompted major clients to postpone some of their purchases. These factors have contributed to the company's revised outlook and the subsequent decline in its stock price.

Despite the disappointing outlook, Applied Materials reported strong financial performance for the previous fiscal quarter. The company's revenue grew by 7.7% year-over-year to 73 billion dollars, surpassing the average analyst estimate of 72.1 billion dollars. Additionally, the company's earnings per share for the quarter were 2.48 dollars, exceeding the analyst estimate of 2.36 dollars. However, the current macroeconomic and policy environment has added to the uncertainty, further affecting market sentiment.