UPDATE - Novellus says profit up, but warns of softness
Monday January 26, 5:36 pm ET
By Daniel Sorid
(Recasts, adds outlook, CEO comments, updates stock)
SAN FRANCISCO, Jan 26 (Reuters) - Novellus Systems Inc. (NasdaqNM:NVLS - News), a producer of microchip-making equipment, on Monday reported a higher quarterly profit as chip makers invested in new factories, but warned that conditions for business in the current quarter could become softer.
Shares of Novellus stumbled as much as 7.6 percent in after-hours trading.
San Jose, California-based Novellus said profit in the fourth quarter ended Dec. 31 jumped to $10.5 million, or 7 cents a share, from $3.0 million, or 2 cents, a year earlier. Sales rose 4 percent to $226.5 million from $217.6 million in the same period last year.
For the current quarter, however, Novellus forecast a profit of 8 cents a share -- at the lower end of analyst expectations -- on revenue of $240 million to $250 million.
Chief Executive Richard Hill told analysts in a conference call that customers in the past week have been "trying to be more conservative on capital expenditures, so we're taking a conservative approach on what orders would be during the first quarter."
Also on Monday, Novellus named a former executive vice president of arch-rival Applied Materials Inc. (NasdaqNM:AMAT - News), Sasson Somekh, as its new president.
Orders, an indicator of future revenue, were expected to grow to $305 million to $315 million, from $283 million in the fourth quarter.
Investors, who have traded shares of chip-related stocks to higher and higher levels on expectations for a strong business turnaround, turned sour on Novellus shares after hours. The stock fell as low as $37.20 from a regular-trading close of $40.25.
Analysts on average had expected earnings in the range of 7 cents to 15 cents a share in the first quarter, with an average estimate of 11 cent, according to a survey by Reuters Research, a unit of Reuters Group Plc. |
