Chip Gear Maker Applied Materials Misses Targets Due to Supply Chain Issues

Semiconductor equipment supplier: Applied materials (AMAT) late Thursday missed Wall Street’s fiscal second quarter targets, citing supply chain problems. His guidance also lacked perspective. AMAT stock fell Friday.

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The Santa Clara, California-based company earned an adjusted $1.85 per share on revenue of $6.25 billion for the quarter ended May 1. Analysts polled by FactSet expected Applied Materials earnings of $1.90 a share on revenue of $6.35 billion. Year-over-year, the company’s profit increased 13%, while sales increased 12%.

“Demand for Applied Materials’ products and services has been unprecedented, but we remain constrained by ongoing supply chain issues,” said Chief Executive Gary Dickerson in a press release.

He added: “Our priority is to work quickly and creatively across the supply chain to bring more industrial capacity online, while accelerating the technology turnarounds that we believe Applied will outgrow the semiconductor market in the coming years.”

AMAT stock drops

In afternoon stock market trading today, AMAT stock fell 7.5% to 102.47. During Thursday’s regular session, AMAT stock fell 0.5% to close at 110.74.

For the current quarter, Applied Materials forecasts adjusted earnings of $1.77 per share on revenue of $6.25 billion. That’s based on the midpoint of his outlook. Wall Street had forecast earnings of $2.04 a share on revenue of $6.68 billion.

According to IBD Stock Checkup, AMAT is ranked 11th out of 31 stocks in IBD’s semiconductor device industry group. It has an average IBD Composite Rating of 67 out of 99. IBD’s Composite Rating is a combination of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories about consumer technology, software, and semiconductor stocks.

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