Applied Materials Inc (NASDAQ:AMAT) stock fell 6.15% (As on February 14, 11:16:42 AM UTC-4, Source: Google Finance) after the company beat expectations on earnings and revenue as it delivered its fiscal first-quarter results, but its guidance for the current quarter came up short. The company said trade restrictions threaten to limit its exports to China, impacting its revenue. The company has delivered a net profit of $1.19 billion in the quarter, down from a profit of $2.01 billion in the year-ago quarter. In the first quarter, sales to Chinese companies amounted to about 31% of its total revenue, down from 45% in the year-ago period. That decline stems from older restrictions on its ability to serve that market.

Moreover, Semiconductor system sales were 5.36 billion for Q1, up 9% year over year, driven by 20% growth in foundry-logic, partially offset by an expected decline in DRAM sales as prior-year sales to customers in China did not repeat. AGS delivered revenue of $1.59 billion in Q1, up 8% year over year, with healthy growth in services partially offset by a decline in sales of 200-millimeter equipment. The company ended the quarter with cash and cash equivalents of $6.3 billion and debt of $6.3 billion. Cash from operations in the quarter was 925 million, capital expenditures were 381 million, and free cash flow was 544 million.

MAT in the first quarter of FY 25 has reported the adjusted earnings per share of $2.38, beating the analysts’ estimates for the adjusted earnings per share of $2.28. The company had reported the adjusted revenue growth of 7 percent to $7.17 billion in the first quarter of FY 25, beating the analysts’ estimates for revenue of $7.15 billion. Non-GAAP gross margin was 48.9%, up 100 basis points year over year

The company said it is expecting second-quarter sales of about $7.1 billion, give or take $400 million. That’s lower than expected, with Wall Street analysts having pegged the company’s sales at $7.21 billion. In addition, the company said it’s expecting earnings of about $2.30 per share, plus or minus 18 cents, which is in line with the Street’s guidance. The company said the lower forecast stems from the U.S. government’s decision to impose tighter restrictions on chipmaking equipment sales to Chinese companies. He estimates that the company will take a hit of about $400 million in sales during fiscal 2025, with half of this being felt in the current quarter. That amounts to 1.4% of the $29.18 billion that analysts have forecast the company to deliver this year.