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Applied Materials warns
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January 30, 2001: 4:15 p.m. ET
Chip equipment maker will miss 1Q sales, earnings target
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NEW YORK (CNNfn) - Applied Materials warned Tuesday that its fiscal first-quarter revenue and earnings will come in below previous expectations.
The world's No. 1 supplier of equipment used to manufacture semiconductors, said it expects revenue to be between 7 percent and 10 percent below the $2.9 billion to $2.95 billion revenue target it previously had set.
Because of the revenue shortfall, the company said its first-quarter earnings per share also will fall short of previous expectations. The latest consensus estimate of analysts polled by First Call was for a first-quarter profit of 74 cents per share on sales of $2.8 billion.
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Demand for semiconductors began to slow late in the fourth quarter of 2000," James Morgan, the company's chairman and chief executive, said in a statement.
 He said that inventory buildups in telecommunication products, slower-than-expected PC sales and slowing global economic growth are causing Applied Materials' customers to reevaluate their capital spending plans.
"Since the beginning of January, a number of our customers have been revising the timing of their capital spending and rescheduling or canceling existing backlog, resulting in the postponement in delivery of equipment," Morgan said. "Therefore, we expect orders and revenue to be below our original targets."
Applied Materials (AMAT: Research, Estimates) shares rose $2.53 to $52.57 in Nasdaq trade ahead of the warning. 
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