Applied Materials tumbles as it expects decline in Q4 revenue

Applied Materials (NASDAQ:AMAT) tumbled more than 10% during early post-market trading Thursday after reporting its third quarter fiscal 2025 financial results.

Although Applied Materials surpassed market estimates for the third quarter, it lowered its fourth quarter forecasts due to macroeconomic and policy issues, including its business in China.

For the quarter ended July 27, the semiconductor equipment company reported adjusted earnings per share of $2.48, which was more than the consensus estimate of $2.36.

Revenue for the quarter totaled $7.3B, which surpassed the estimate of $7.21B.

However, for the quarter in progress, Applied Materials projects revenue ranging from $6.2B to $7.2B with a midpoint of $6.7B well below the estimate of $7.32B. The company expects adjusted EPS to range from $1.91 to $2.31 with a midpoint of $2.11 less than the consensus of $2.38.

“We are currently operating in a dynamic macroeconomic and policy environment, which is creating increased uncertainty and lower visibility in the near term, including for our China business,” said Applied Materials CEO Gary Dickerson.

“We are expecting a decline in revenue in the fourth quarter driven by both digestion of capacity in China and non-linear demand from leading-edge customers given market concentration and fab timing,” added Applied Materials CFO Brice Hill. “We are navigating and adapting to the near-term uncertainties by leveraging our robust supply chain, global manufacturing footprint and deep customer relationships.”