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: Applied Materials could lose more than $1 billion in sales from China ban over six months


Applied Materials Inc. disclosed Wednesday that a widened ban on sales of certain tech to China will likely cost the chip-equipment manufacturer up to $1.1 billion in sales over six months.

Applied Materials

executives expect a loss of $250 million to $550 million in sales in its fiscal fourth quarter because of U.S. Commerce Department rules that came out Friday, widening a list of tech products that companies needed a license to sell to China. Applied Materials said the ban could hurt first-quarter sales by roughly the same amount.

Shares declined 1.5% in after-hours trading following the announcement, after a 0.4% decline in the regular session to close at $76.01.

As a result, Applied Material executives revised their financial forecast for the fiscal fourth quarter. They now expect fiscal fourth-quarter earnings of $1.54 to $1.78 a share, compares to the prior forecast of $1.82 to $2.18 a share. The forecast includes a 23-cents-a-share charge for resulting inventory and remanufacturing costs.

The company also expects fourth-quarter revenue of $6.15 billion to $6.65 billion, down from its prior forecast of $6.25 billion to $7.05 billion.

Analysts surveyed by FactSet had estimated earnings of $2.01 a share on revenue of $6.67 billion for the fiscal fourth quarter. Analysts were expecting first-quarter revenue of $6.79 billion on average, according to FactSet.

Applied Materials shares have declined 51.7% so far this year, as chip stocks have been pounded amid a sudden switch from a shortage to a glut of many kinds of semiconductors. The S&P 500 index

has declined 24.7% in that period, while the PHLX Semiconductor Index

has dropped 44.3%.

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