DOW JONES NEWSWIRES
Novellus Systems Inc.'s (NVLS) second-quarter loss widened as
revenue plunged and the company recorded restructuring charges.
Shares fell 2.3% to $18.24 in after-hours trading as the
semiconductor-equipment maker posted its fourth loss in the past
five quarters. The stock price has soared 81% in the past eight
months.
The results were in line with its April guidance, although the
gross margin fell below the company's prediction.
Chief Executive Richard Hill noted "a rebound in orders off of
historically low levels" and "increased customer activity." He said
Novellus is making structural changes in order to return to
profitability before industry conditions return to normal.
In May, Hill said the long-depressed market for semiconductor
equipment had bottomed, although he didn't expect strong demand to
return quickly. The trade group Semiconductor Equipment and
Materials International predicted capital spending by chip makers
would drop 43% this year. Several analysts have raised investor
ratings on Novellus recently.
Novellus reported a loss of $50 million, or 52 cents a share,
compared with a loss of $2.4 million, or 2 cents a share, a year
earlier.
The latest results included $15.9 million in charges related to
work-force reductions and restructuring and a $4.9 million
write-down of inventory and evaluation systems. The prior-year
results included $13.6 million in impairment and severance charges
related to cost cuts and restructuring. Excluding items, the loss
was 41 cents a share, compared with year-earlier earnings of 6
cents.
Revenue dropped 54% to $119.2 million.
In April, Novellus predicted a loss of 35 cents to 45 cents a
share on sales of $110 million to $125 million.
Gross margin fell to 26% from 43.1%, below the company's April
forecast of 29% to 33%.
Bookings climbed 43% from the first quarter, in line with the
company's May raised forecast of 30% to 55% growth from the
previous period. Shipments increased 30% sequentially.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com