Applied Materials Inc on Thursday forecast sales for the current quarter above market estimates, thanks to demand for its semiconductor manufacturing tools from chipmakers rushing to add capacity amid a global shortage.
A pandemic-driven boom in sales of laptops, gaming consoles and personal vehicles has forced automakers to compete with the consumer electronics industry for scarce chip supplies, boosting orders for chip factory tools from Applied Materials.
Shares were mostly flat in after-hours trading.
The company said it expected current-quarter net sales of US$6.33 billion, plus or minus US$250 million, compared with analysts' estimates of US$6.04 billion, according to Refinitiv IBES data.
It also reported a 41per cent rise in sales to US$6.2 billion for the third quarter, ended Aug. 1.
Profits more than doubled to US$1.72 billion, or US$1.87 per share, in the quarter, from US$841 million, or 91 cents per share, a year earlier.
Excluding items, the company earned US$1.90 per share, beating analysts' average estimate of US$1.77, according to Refinitiv data.
The company's semiconductor systems business, which contains most of its tool sales, had sales of US$4.45 billion, the highest ever for the segment and above analyst estimates of US$4.27 billion, according to data from FactSet.
Applied said that only about half of the revenue for computing chip tools came from equipment used for leading-edge chips. The rest came from tools that were once considered legacy tools used to make older styles of chips.
But in recent years those tools have found new life making sensors and radio chips that help connect devices to wireless networks. Everyday things from stop lights to factory machines are now being connected to data centers, where their performance is analyzed and optimized.
"This is a massive transformation of every industry that's going to happen. Semiconductors are at the foundation of that," Chief Executive Gary Dickerson told Reuters in an interview.
(Reporting by Chavi Mehta and Eva Mathews in Bengaluru; Editing by Aditya Soni, Aurora Ellis and Steve Orlofsky)