Applied Materials Inc. shocked investors with fourth-quarter fiscal 2023 earnings that blew past all expectations, coming in at a magnificent $2.12 per share, beating the Zacks Consensus Estimate by 7.1%. Despite this stellar performance, the company experienced a decline in net sales of 0.4% from the year-ago fiscal quarter, totaling $6.72 billion. This plunge was primarily attributed to struggles in the Semiconductor Systems segment, causing a drop in overall revenue.

Global Challenges and Highlights

Weakening momentum across Korea, Taiwan, Southeast Asia and the United States struck a major blow. However, there were bright spots, with strong performance in China, Europe, and Japan. The company experienced growth in the Applied Global Services segment and the Display segment.

Segment Performance Dissection

Semiconductor Systems contributed 72.6% to net sales, with generated sales of $4.88 billion, reporting a 3.1% decrease from the year-ago fiscal quarter. Furthermore, Applied Global Services and the Display and Adjacent Markets also presented a mixed bag of results.

Revenues by Geography and Fiscal Health

The United States, Europe, Japan, Korea, Taiwan, Southeast Asia, and China constituted sales worth different amounts. Cost structures, expenses, cash flow, and debts also underwent some changes.

Guidance Gloom and Other Stock Stories

For the first quarter of fiscal 2024, Applied Materials anticipates net sales of $6.47 billion (+/-$400 million). This gloomy outlook is further complicated by the company’s current Zacks Rank #3 (Hold). However, other tech stocks like Badger Meter, Arista Networks, and Salesforce are showing promising signs.