Applied Materials: Estimated for reduced profits as the problems in the production of microcircuits will continue

Applied Materials Inc., a US company that supplies equipment, services and software for the production of microcircuits (chips), expects that its revenues and profits will be lower than expected for the third quarter.

The company has hinted that supply chain problems exacerbated by the lockdown in China will make it more difficult to meet the needs of the mechanical equipment used to make the chips.

A shortage of spare parts for microcircuit machines is putting pressure on the wider supply chain, which is already facing greater demand than can be met by microcircuit producers.

“We expect our capacity to meet demand to remain limited by the continuing challenges in the supply chain in the medium term, with gradual improvements beginning in the fourth quarter,” Gary Dickerson, the company’s chief executive, said in a statement yesterday. subject to the financial performance of the company.

Applied Materials expects revenue of $ 6.25 billion (€ 5.91 billion) for the quarter, plus or minus $ 400 million (€ 378.20 million). Analysts expect average revenue of $ 6.73 billion (€ 6.36 billion), according to Refinitiv IBES.

“There is a weak consumer demand for products such as smartphones, personal computers and TVs. As a result, demand for screen-related equipment has declined as we adjust our revenue prospects,” said Bryce Hill, chief financial officer.

Sales in the display-related markets rose 1.6% to $ 385 million (€ 364.01 million) in the quarter ended May 1.

The company expects its adjusted earnings to be between $ 1.59 and $ 1.95 ($ 1.50 and $ 1.84) per share in the third quarter, with this forecast being lower than the $ 2.04 earnings estimate (1.93 euros).

For the second quarter, the company reported earnings of $ 1.85 (€ 1.75) per share and revenue of $ 6.25 billion (€ 5.91 billion) with Wall Street having higher expectations.