Applied Materials delivers upbeat earnings guidance as Q3 results beat estimates

Investing.com -- Applied Materials reported upbeat earnings guidance for the current quarter Thursday after fiscal third-quarter results topped Wall Street estimates, driven by ongoing growth in China despite ongoing regulatory headwinds.

Applied Materials Inc (NASDAQ AMAT) (NASDAQ:AMAT) fell 1% in afterhours following the news.

Fro three months ended Jul. 28, the chip equipment maker reported adjusted diluted earnings per share of $2.05, up from $1.85 from the prior year, while revenue rose to $6.78 billion from $6.43B. That was ahead of analyst expectations for EPS of $2.02 on revenue of $6.54B.

Net revenue was boosted by improving demand for data storage as DRAM, or Dynamic Random Access Memory, used in devices for temporary data storage, accounted for 24% of revenue, up from 17%.

The growth in DRAM comes even as the company previously warned that China DRAM revenue was expected suffer hit in Q3 and near zero in the Q4.

Sales in China, which account for nearly a third of growth, rose to $2.15B in Q3 from $1.73B in the same period a year earlier, while sales in the United States inched higher to $1.05B from $1.04B a year earlier.

The growth in China comes even as the company faces export restrictions and geopolitical tensions following the U.S. export ban on semiconductor and semiconductor equipment sales to China.

Looking ahead to fiscal Q4, the company sees non-GAAP diluted EPS in the range of $2.00 to $2.36, or $2.18 at the midpoint, on revenue of $6.93B, plus or minus $400M. That compared with estimates for adjusted EPS of $2.14 on revenue of $6.92B.