: Applied Materials could lose more than $1 billion in sales from China ban over six months

by | Oct 12, 2022 | Stock Market

Applied Materials Inc. disclosed Wednesday that a widened ban on sales of certain tech to China will likely cost the chip-equipment manufacturer up to $1.1 billion in sales over six months. Applied Materials
AMAT,
-0.38%
executives expect a loss of $250 million to $550 million in sales in its fiscal fourth quarter because of U.S. Commerce Department rules that came out Friday, widening a list of tech products that companies needed a license to sell to China. Applied Materials said the ban could hurt first-quarter sales by roughly the same amount.

Shares declined 1.5% in after-hours trading following the announcement, after a 0.4% decline in the regular session to close at $76.01. As a result, Applied Material executives revised their financial forecast for the fiscal fourth quarter. They now expect fiscal fourth-quarter earnings of $1.54 to $1.78 a share, compares to the prior forecast of $1.82 to $2.18 a share. The forecast includes a 23-cents-a-share charge for resulting inventory and remanufacturing costs. The company also expects fourth-quarter revenue of $6.15 billion to $6.65 billion, down from its prior forecast of $6.25 billion to $7.05 billion. Analysts surveyed by FactSet had estimated earnings of $2.01 a share on revenue of $6.67 billion for the fiscal fourth quarter. Analyst …

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