Santa Clara, California–Applied Materials warned the industry that its earnings for the first quarter, ending January 28, would be lower than previous estimates. During the company’s fourth quarter conference call, Applied estimated its earnings, for the first quarter, to be $2.9 to 2.95 billion. The company now expects to be 7 to 10% below that target.

Applied’s CEO James Morgan blamed the slowdown on decreased demand for semiconductors during the fourth quarter. “Inventory buildups in telecommunication products, slower than expected PC sales, and slower global economic growth are now causing customers to reevaluate their capital spending plans. Since the beginning of January, a number of our customers have been revising the timing of their capital spending and rescheduling or cancelling existing backlog, resulting in the postponement in delivery of equipment. Therefore, we expect orders and revenue to be below our original targets,” noted Morgan.

Based on the news, analysts at SG Cowen are forecasting Applied’s 1Q revenues to be $2.7 billion, with an estimated EPS of $0.62. The company will release its earnings on Tuesday, February 13, after the market closes.–Meg Villeneuve