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Aug. 8, 2022, 10:54 p.m. EDT

Tokyo Electron Ltd. Shares Slump After It Posts 12% Drop in First-Quarter Net Profit

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By Kosaku Narioka

Tokyo Electron Ltd.'s shares fell sharply Tuesday morning after the maker of semiconductor production equipment posted a 12% drop in its first quarter net profit due partly to higher costs.

The shares were recently 8.4% lower at 45,510 yen after falling as much as 9.4% earlier.

Tokyo Electron said Monday after the market closed that net profit fell to 88.095 billion yen ($652.5 million) for the quarter ended June 30 from Y100.36 billion a year earlier. That missed the estimate of Y119.93 billion from a poll of analysts by FactSet.

Revenue climbed 4.8% to Y473.65 billion, while costs of sales rose 13% and selling, general and administrative expenses increased 20%. Revenue from chip production equipment in China fell 39% from a year earlier to Y94.09 billion, as some of its major cities were locked down in response to the rise in Covid-19 infections during the period.

Tokyo Electron projected the market for wafer fab equipment to grow 5%-15% in 2022, lower than its previous view of about 20% growth, due to economic slowdown concerns, parts shortage and the disruption of supply chains.

The company kept its earnings forecasts for the fiscal year ending March. It continued to expect revenue to rise 17% to Y2.350 trillion and net profit to increase 20% to Y523.00 billion.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

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