The company's second quarter revenue as of February 28 exceeded expectations. Although Meguiar's forecast for the third quarter was lower than Wall Street's, it said demand could start to grow again before the fourth quarter.
At the time of the announcement, the global semiconductor industry was oversupply due to intelligenceMobile phoneDemand declines, and cloud computing vendors'procurement patterns are uneven. Earlier this year, cloud computing hit chipmakers such as Intel.
Meanwhile, Meguiar cut its spending plans and said it had idled some factory production lines to keep chip production in line with declining demand, help maintain profit flow and put stock repurchase plans on track.
In the second quarter, Meguiar generated nearly $1 billion in free cash flow and earned $1.71 a share after deducting the project. Refinitiv's IBES data show that this is lower than $2.82 a year ago, but higher than Wall Street's expected $1.67.
Meguiar said Wednesday it expects revenue in the third quarter to be between $4.6 billion and $5.3 billion, lower than analysts'estimates. The company cut its capital expenditure plan for fiscal year 2019 to $9 billion, down from the previous projection of $9 billion (6.8 billion) to $9.5 billion, according to Meguiar executives.
Revenue fell from $7.35 billion to $5.84 billion, exceeding expectations of $5.3 billion.
As part of its $10 billion stock repurchase program, Meguiar said it had repurchased 21 million common shares for $702 million in the quarter, leaving $2.99 billion in net cash.