Applied Materials Gives Upbeat Earnings Guidance As Q3 Results Beat Estimates By Investing.com

Investing.com — Applied Materials on Thursday reported upbeat earnings estimates for the current quarter after fiscal third-quarter results beat Wall Street estimates, driven by continued growth in China despite regulatory headwinds.

Applied Materials Inc (NASDAQ) (NASDAQ:AMAT) fell 1% in after hours after the news.

For the three months ended July 28, the chip equipment maker reported adjusted diluted earnings per share of $2.05, up from $1.85 a year earlier, while revenue rose to 6.78 USD billion from USD 6.43 billion. That beat analysts’ expectations for EPS of $2.02 on revenue of $6.54 billion.

Net income was boosted by increased data storage demand, as DRAM, or Dynamic Random Access Memory, used in devices for temporary data storage, accounted for 24% of revenue, up from 17%.

The DRAM increase comes even as the company previously warned that DRAM revenue in China is expected to take a hit in Q3 and close to zero in Q4.

Sales in China, which account for nearly a third of the growth, rose to $2.15 billion in Q3 from $1.73 billion in the same period a year earlier, while sales in the United States rose to 1, 05 billion from $1.04 billion a year earlier.

The growth in China comes even as the company faces export restrictions and geopolitical tensions as a result of a US ban on semiconductor and semiconductor equipment exports to China.

Looking to the fiscal fourth quarter, the company sees non-GAAP diluted EPS in the range of $2.00 to $2.36, or the midpoint of $2.18, on revenue of $6.93 billion, plus or minus 400 million USD. That compared to estimates for adjusted EPS of $2.14 on revenue of $6.92 billion.