Novellus Systems Inc. (NVLS) expects to report results for the third quarter in the range of a loss of 15 cents a share to break-even on a non-GAAP basis, as business conditions for chip-equipment makers improve from deeply depressed levels.

Revenue is expected within the range of $150 million to $180 million with gross margins at 40%, plus or minus 2 percentage points.

"Clearly, things are improving, and they're improving not only because of the market but also because what we're doing," Chief Executive Richard Hill said during a conference call hosted at Semicon West, an industry conference.

Hill said the company is taking "proactive steps" to shrink the business in line with expected future demand.

The San Jose, Calif.-based maker of the tools used in semiconductor manufacturing also said bookings - a closely watched indicator of future business - will be up 20% to 50%.

The outlook tops analysts' average estimates, which call for a loss of 24 cents a share on revenue of $139.2 million, according to Thomson Reuters.

Novellus shares were recently down 1.5% to $18.38 in after-hours trading. The stock price has soared 81% in the past eight months on hopes that the worst is over for the long-struggling sector.

-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155; jerry.dicolo@dowjones.com