(Reuters) - Applied Materials forecast first-quarter revenue and profit above Wall Street estimates on Thursday, as the chip gear maker expects more clients to upgrade their equipment ahead of the 5G rollout in key markets.
Shares of the company, whose results are seen as a barometer for the semiconductor industry, rose 4% in extended trading.
The company is looking to benefit from chipmakers trying to upgrade their equipment as they pack more computing power into smaller chips in the wake of the 5G rollout and data center growth.
“We’re optimistic about 2020, with an expectation of sustained strength in foundry, logic and a step-up in memory investments during the year,” said Chief Executive Officer Gary Dickerson in a call with analysts.
Sales from China, its largest market, rose 5.5% to $1.20 billion in the fourth quarter, contributing 32% to the overall revenue.
Revenue from semiconductor systems, which supplies gears for chip makers, rose 2.5% to $2.30 billion, edging past FactSet estimates of $2.23 billion.
The company forecast first-quarter revenue to be about $4.10 billion, plus or minus $150 million, above analysts’ estimates of $3.71 billion, according to IBES data from Refinitiv.
It expects adjusted profit to be in the range of 87 cents and 95 cents per share, above market expectations of 74 cents.
The upbeat forecast comes amid a 16-month long trade U.S.-China dispute and a decline in memory prices that began with an oversupply of DRAM and flash memory.
Revenue fell marginally to $3.75 billion in the quarter ended Oct. 27, but beat analysts’ estimates of $3.68 billion, according to IBES data from Refinitiv.
Excluding items, the company earned 80 cents per share, above analysts’ estimates of 76 cents.
Reporting by Ayanti Bera in Bengaluru; Editing by Amy Caren Daniel