After-Hours Alert: Why Applied Materials Stock Is Tumbling

Applied Materials Inc AMAT shares are trading lower in Wednesday's after-hours session after the company cut its fourth-quarter guidance.

"On Oct. 7, 2022, the United States government announced new export regulations for U.S. semiconductor technology sold in China, including wafer fabrication equipment and related parts and services. Applied currently estimates that the new regulations will reduce its fourth-quarter net sales by approximately $400 million, plus or minus $150 million," the company said.

Applied Materials now expects fourth-quarter revenue of approximately $6.4 billion, plus or minus $250 million versus average analyst estimates of $6.67 billion, according to Benzinga Pro. The company said its revised outlook reflects the impact of the new export regulations partially offset by supply chain performance improvements.

Applied Materials also lowered its adjusted earnings guidance from a range of $1.82 to $2.18 per share to a range of $1.54 to $1.78 per share versus average analyst estimates of $2.01 per share. The company said its revised earnings outlook includes a preliminary estimated impact of approximately 23 cents primarily for inventory and remanufacturing charges related to the new export regulations.

Applied Materials said it's pursuing additional export licenses and authorizations where needed. The company currently expects the new regulations to impact revenues in the first quarter of fiscal 2023 by a similar amount as in the current quarter. 

AMAT Price Action: Applied Materials has a 52-week high of $167.06 and a 52-week low of $74.97.

The stock was down 1.21% in after hours at $75.10 at time of publication.

Photo: brookhaven from Pixabay.