reported better-than- expected earnings for the October quarter, but its shares fell after a media report offered new details about a U.S. Justice Department probe into the company.
On Thursday, just as Applied Materials (ticker: AMAT) released its earnings, Reuters reported that the company was under criminal investigation by the Justice Department for sending its equipment to a Chinese company without the required licenses.
Shares were down 7% in after-hours trading.
Reuters said the chip equipment maker is “being probed by the Justice Department for sending equipment to SMIC via South Korea without export licenses,” citing unidentified sources. “Hundreds of millions of dollars of equipment is involved,” the report said.
Applied Materials disclosed in October 2022 that it “received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting information relating to certain China customer shipments.”
“We are cooperating fully with the government,” the company said at the time.
On its earnings call Thursday, the company declined to provide more details on the Reuters report. “We did disclose this last October,” chief financial officer Brice Hill said.
The company did not respond to an e-mailed request for comment from Barron’s. A spokesperson for the company could not be reached.
As for its quarterly results, Applied Materials reported adjusted earnings of $2.12 a share for the October quarter, compared with the consensus estimate of $1.99 among Wall Street analysts tracked by FactSet. Revenue came in at $6.7 billion, above analysts’ expectations of $6.5 billion.
Applied Materials also forecast a range of potential revenue for the current quarter with a midpoint of $6.5 billion, compared with the consensus view of $6.4 billion.
The company’s customers include
Taiwan Semiconductor Manufacturing
Write to Tae Kim at [email protected]