Applied Materials, Inc. (NASDAQ:AMAT) stock fell 5.10% (As on November 17, 11:30:36 AM UTC-4, Source: Google Finance) after the report that it faces a US criminal investigation for allegedly violating export restrictions to China. The company is being probed by the Justice Department over dealings with China’s biggest chipmaker, Semiconductor Manufacturing International Corp., according to Reuters. The department is looking at whether Applied Materials sold hundreds of millions of dollars of equipment without the proper licenses, citing unidentified people familiar with the situation. The largest U.S.-based chip equipment manufacturer is alleged to have sent equipment to SMIC via South Korea without the appropriate export licenses. The Justice Department declined to comment. Applied Materials declined to discuss details of the case but noted that it previously disclosed a federal review of China deliveries. The U.S. Commerce Department has placed severe restrictions on the shipment of advanced computer chips and chipmaking equipment to China, citing national security concerns. As a result, chipmakers and semiconductor equipment providers are required to obtain an export license to sell those products to Chinese customers. It’s said that the Justice and Commerce departments have created a task force to investigate and prosecute any violations of those controls.

Meanwhile, the company forecast first-quarter revenue above analysts’ estimate. Applied Materials, expects first-quarter revenue of $6.47 billion, plus or minus $400 million, higher than analysts’ estimates of $6.37 billion, according to LSEG data. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.72 to $2.08.

AMAT in the fourth quarter of FY 23 has reported the adjusted earnings per share of $2.12, beating the analysts’ estimates for the adjusted earnings per share of $1.99. The company had reported flat adjusted revenue to $6.72 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue by 3.4%. Net income for the period came to $2.4 billion, up from $1.59 billion a year earlier. On a non-GAAP adjusted basis, the company reported gross margin of 47.3 percent, operating income of $1.98 billion or 29.5 percent of net sales. The company generated $1.56 billion in cash from operations and distributed $968 million to shareholders including $700 million in share repurchases and $268 million in dividends. Applied’s broad product portfolio, strong customer relationships and leadership at major technology inflections put us in a great position to profitably grow the company as powerful trends fuel the semiconductor industry’s expansion in the years ahead.