Applied Materials shares dropped 13% after issuing weak guidance due to demand pressures in China. The company forecasted adjusted earnings of $2.11 per share, falling short of the $2.39 estimate. CEO cited trade issues and lower visibility, with China business impacted. Weakness also seen in leading edge customers and reduced spending by China clients.

Despite the weak guidance, Applied Materials exceeded third-quarter earnings and revenue estimates. The company posted adjusted earnings of $2.48 per share on $7.3 billion in revenue. Net income reached $1.78 billion, or $2.22 a share, compared to $1.71 billion, or $2.05 a share, last year.

Bank of America analyst downgraded Applied Materials shares to neutral, citing ongoing China and leading-edge headwinds. Concerns of persisting uncertainty may hinder stock performance despite reasonable valuation. The slowdown is believed to be more company-specific, affecting outlook for the semiconductor equipment maker.

Read more at CNBC: Applied Materials sinks 13% on weak guidance due to China demand