Investing.com - Shares in Applied Materials (NASDAQ:AMAT) slipped in extended hours trading after the chipmaking equipment maker posted weaker-than-anticipated sales at its largest segment.
Revenue from its semiconductor systems unit, which accounts for the greatest part of its overall sales, came in at $5.26 billion, compared with estimates of $5.32 billion, according to LSEG data cited by Reuters.
California-based Applied has been grappling with new U.S. restrictions on the export of some chip manufacturing gear to China, its biggest foreign market. Revenue from the country made up around 25% of overall sales in its fiscal second quarter, falling from 43% a year ago.
In the quarter ended on March 31, Applied posted total revenue of $7.10 billion, versus projections of $7.13 billion. Adjusted per-share income was $2.39, with analysts calling for $2.31.
For its third quarter, Applied guided for revenue of $7.20 billion, plus or minus $500 million. CFO Brice Hill noted a "dynamic economic and trade environment", but said the firm has not seen a "significant" change to demand.
"Geopolitics remains an important source of potential volatility," analysts at Morgan Stanley (NYSE:MS) said in a note to clients.
"Given what we have seen of late, it seems likely that we will move from Biden export controls -- which were quite disruptive, but followed a predictable annual cadence process -- to potential Trump export controls, which could also be disruptive, where timing can be a little more idiosyncratic, headline driven, and with rules that can be done and then undone -- but the longer term outlooks of China constraint are a common factor."
(Yasin Ebrahim contributed reporting.)