Applied Materials shares fell sharply on Friday after the company reduced its revenue and sales projections in its semiconductor business this quarter below Wall Street expectations.
"Smart phone sales have been below expectations, especially for high-end models In response, semiconductor and display providers have made adjustments to their capacity planning, "the president said on Thursday's earnings call.
Applied Materials said it expects semiconductor sales revenue to grow 7 percent in the current quarter, well below the 13.8 percent boost expected on the street, according to FactSet.
As a barometer for the rest of the industry, applied The main customers of Materials include other large multinational companies such as Samsung Electronics, Micron and Intel. Shares of Micron and Intel also fell on Friday.
The disappointing guide generated critical comments from Goldman Sachs badysts, who downgraded the company's stock to neutral buying on Friday.
"We reduced the Applied Materials from Buy to Neutral as we reduced our estimates and target price reflecting the disappointing market share prospects in Semi Cap Equipment's core business, the worse-than-expected fundamentals on Display and the prospects for moderate gross margins, "wrote badyst Toshiya Hari.
Hari, who highlighted Goldman remains "constructive" in the competitive positioning of Applied Materials, however he reduced the company's target price to $ 58 from $ 65, implying a 7% increase in the next 12 months
Despite the lackluster guidance, Applied Materials posted second-quarter results that exceeded consensus expectations and optimistic comments seeking business in general.
The company reported adjusted earnings per share of $ 1.22 versus expectation "Internet of Things, Big Data and Artificial Intelligence will interrupt and transform virtually all industries and areas of the economy in the next decade," Dickerson said in a statement. the earnings call "While we are just at the beginning of the construction of the era of big AI data, we are already starting to see the positive impact on our markets."
– Michael Bloom of CNBC contributed to this report. .