SAN FRANCISCO, March 28 (Reuters) - Applied Materials Inc forecast 2012 results below Wall Street targets, but plans cost reductions to offset a persistent downturn in solar and display markets.
Its shares slid 2.8 percent to closed at $12.46.
The world’s largest manufacturer of chip-making gear on Wednesday expects revenue of $9.1 billion to $9.5 billion in fiscal 2012, lagging the almost $9.6 billion that analysts expect on average.
It predicted earnings of 85 cents to 95 cents after excluding one-time items, below the 96 cents Wall Street expects, according to Thomson Reuters I/B/E/S.
Applied Materials’ semiconductor clients curtailed spending on capital equipment as they struggled to climb out of a years-long market slump. But rapid growth in mobile consumer electronics helped trigger the beginnings of a rebound.
On Wednesday, executives at the company’s annual investor day forecast more than $30 billion of spending on wafer fabrication gear in 2013.
But sales to solar cell makers and display technology makers remain hurt by oversupply and weak pricing. Subsidy cuts in Europe earlier this year triggered a global glut of solar panels and drove down prices sharply.
“As a result of the sharp capacity-driven downturn in our solar and display equipment markets, these businesses are focused on reducing costs to improve profitability,” chief financial officer George Davis said in a statement on Wednesday.