Applied Materials Withdraws Guidance as Pandemic Disrupts Supply Chain

Applied Materials withdraws its fiscal second-quarter guidance because of disruptions to its supply chain and manufacturing operations.
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Applied Materials  (AMAT) - Get Report, the maker of semiconductor equipment, said it was withdrawing its fiscal second-quarter guidance because the global coronavirus outbreak was causing disruptions to the company's supply chain and manufacturing operations.

"While the company's global operations network is designed to provide significant flexibility and redundancy, various governmental orders in the U.S. and other countries as well as reductions in airline schedules around the world are resulting in major disruptions to the supply chain and logistics operations that support our industry," Applied Materials said in a statement. "The situation is fluid, and we will provide more information during our next earnings webcast. "

The stock was rising 4.51% to $41.98 in premarket trading Tuesday after closing the previous session at $40.17, up $5.74.

The first quarter for Applied Materials, based in Santa Clara, California, ends April 26. The company previously forecast sales for the current fiscal second quarter about $4.3 billion.

The company also said in its statement that it remains "committed to the proposed acquisition of Kokusai Electric and are working to close the transaction, subject to regulatory approval."

Meanwhile, Goldman Sachs analyst Toshiya Hari removed shares of Applied Materials from the firm's Conviction List but maintained a buy rating on the stock with a price target of $50, down from $75, according to The Fly.