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Novellus hits profit target
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October 15, 2001: 5:40 p.m. ET
Chip-equipment maker's earnings match expectations on stronger sales.
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NEW YORK (CNNmoney) - Novellus Systems Monday logged a third-quarter operating profit that matched Wall Street's expectations on stronger-than-expected sales.
After the closing bell, Novellus, which makes the equipment used to manufacture semiconductors, said it earned $35.2 million, or 24 cents per share, during the quarter ended Sept. 29. That excludes restructuring and other one-time items and compares with an operating profit of 62 cents per share during last year's third quarter.
The company's third-quarter operating profit was in line with the 24 cents per share analysts generally had expected, according to a survey conducted by earnings tracker First Call.
Including restructuring and other one-time charges totaling $71.3 million, Novellus reported a third-quarter net loss of $14 million, or 10 cents per share. That compares with a net profit of $43.3 million, or 31 cents per share, during the same quarter last year.
At $303.7 million, Novellus' third-quarter revenue rose 3.6 percent from $292.9 million a year ago and exceeded the $299.5 million in sales Wall Street had expected, according to the First Call survey.
The company said third-quarter shipments totaled $192.9 million, down from the $274.6 million in shipments it reported during the second quarter.
The company's total bookings for the quarter amounted to $124 million, which Richard Hill, Novellus' chairman and chief executive officer, said was below the company's "worst-case estimate" envisioned in August.
He said the lower orders could be attributed in large part to business disruptions caused by last month's terrorist attacks on the United States, which many high-tech companies have said caused them not to be able to close some contracts they had expected to close by the end of the quarter.
"As you know, this business comes in big chunks, and the world stood still on September 11, and two big chunks pushed into the fourth quarter," Hill said in a teleconference with analysts Monday evening.
The ordering patterns of chip-equipment makers are key indicators for analysts, who use them to gauge the broader conditions in the semiconductor industry. Faced with a sharp drop in demand, most chipmakers have pared back their spending in an effort to maintain profitability, and many have either deferred or cancelled their capital-equipment orders.
Smith said he expects Novellus' fourth-quarter orders to range between $125 million to $150 million, a range he said he had confidence in because orders that slipped to the fourth quarter from the third.
Novellus' fourth-quarter shipments are forecast at $160 million, and the company is aiming for a fourth-quarter operating profit of 11 cents per share, Smith said. That would match the current First Call consensus estimate.
After sliding more than 6.6 percent on Nasdaq during the regular session, Novellus (NVLS: Research, Estimates) shares slipped another $1.15 to $30.49 in extended-hours trade Monday. 
-- Reuters contributed to this report
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