Chip equipment maker, Applied Materials posted its second quarter results which exceeded market expectations. Its revenue figures stood at $4.57 billion against the analysts’ estimates of $4.45 billion while adjusted per share earnings was $1.22 against their expected $1.14 per share.

Chief Executive, Dickerson was very optimistic in his earnings call stating that his company had vast scope across latest technology trends and he was seeing their encouraging effect on the markets.

However, its lack-luster guidance for the sales and revenue estimates of its semiconductor business for the current quarter led to a sharp drop in its share price. The rate which dipped to a 9.5% plus on Friday came to rest at 8.2% by early noon. This was the worst downfall experienced by the stock after February 2009.

The subdued forecast hiked the anxiety quotient of the investors against the backdrop of falling markets for smartphones, especially for the top-end categories. They felt that a plateaued market for smartphones could halt the requirement for flash memory chips. In view of this scenario, Chief Executive, Gary Dickerson assured that display and semiconductor suppliers had accordingly adjusted their planning for capacity requirements. The dismal projections included a 7% rise for the present quarter against the high 13.8% estimated by Wall Street.

The Applied Materials share price drop led to a fall in shares of its leading customers like Micron and Intel with Samsung Electronics being one another of the company’s big-shot customer. Analysts from Goldman Sachs changed the grading of Applied Materials from a buy to neutral on Friday. Though the company’s competitive position was not disputed by the analyst the price target of the company was lowered from $65 to $58.

However, Applied Materials second quarter performance to some extent offered a silver lining to an otherwise lackluster day for the company.