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Applied Materials warns on profits

by on12 July 2012

Chipmaking gear down

Applied Materials, which makes chip-making gear, has issued a profit warning after seeing its sales slump. The company's results are important because they are an indicator of the fortunes of the chip industry generally. If the market is expanding, Applied Materials tends to do rather well.

Applied shares lost 2.7 per cent after the company warned that  revenue for the year ending in October to fall below its stated outlook of $9.1 billion to $9.5 billion. Applied blamed  “weaker than expected near-term demand in its semiconductor equipment business, primarily among foundry customers.”

It is not quite sure how bad things will be.  Applied expects its fiscal third-quarter results for the period ending July 29 to be within its earlier forecast, but its beancounters will have to come up with some new figures for the during its next earnings call on August 15.

According to Market Watch, bad news from Applied, alongside AMD's profit warning, indicates a dark time for the chip industry.

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