NANO ( $24 - $19 ) Says Revenues to Drop 25 Percent
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MILPITAS, Calif. (Reuters) - Nanometrics Inc. (Nasdaq:NANO - news), a maker of measurement equipment used to build microchips and computer monitors, said on Friday it expects fourth-quarter revenues to miss expectations, citing industry overcapacity and the U.S. and Japanese economic slowdown.
The company said it now expects those revenues to fall about 25 percent from the third quarter. The company had previously said it expected the quarter's revenues to be flat from third quarter revenues of $10.1 million.
Investors responded by bidding Nanometrics' stock price down 14.5 percent initially, and it was still off $2.80, or 11 percent, at $22.10 in late morning trading on the Nasdaq.
The company did not provide any earnings guidance. Four analysts polled by market research firm Thomson Financial/First Call estimated Nanometrics will post a loss of 3 cents a share, with estimates ranging from losses of 1 cent to 5 cents.
Makers of microchips and equipment used in the production of microchips have suffered this year during the worst slump in the industry's history.
``The current environment for the semiconductor capital equipment sector is about as depressed as the sector gets, reflecting the current weak economy, the current depressed level of prices for semiconductors and the current oversupply,'' said Tim Ghriskey, senior partner with Ghriskey Capital Partners, a Connecticut-based investment management firm.
The sector's stocks remain attractive, however, based on the potential for economic recovery, resulting in a rebound in semiconductor demand that would in turn boost financial results of industry companies, said Ghriskey, who does not own Nanometrics stock.
``The current demand for all semiconductor equipment continues to show significant weakness, which has been reflected in all companies in our industry,'' Nanometrics President and Chief Executive John Heaton said in a statement.
``While we remain optimistic about our products and technology, our customers are still trying to sort out the overcapacity and reduced demand for semiconductors,'' he added.
Applied Materials Inc. (Nasdaq:AMAT - news), the world's largest maker of semiconductor-manufacturing equipment, said earlier this month that it would cut 1,700 jobs, or 10 percent of its work force, following a 90 percent plunge in fourth-quarter profits last month. It accounts for about 20 percent of Nanometrics' revenues, according to S.G. Cowen.
Nanometrics rival Nova Measuring Instruments Ltd. (Nasdaq:NVMI - news), based in Israel, said last month it would cut its work force by 10 percent and salaries by up to 15 percent in a cost-cutting move amid the economic slowdown. |
