Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Pink Minion who wrote (11317)	8/28/2003 9:08:59 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95663

Novellus Outlook: Inventory Write-Down Planned Thursday August 28, 7:09 pm ET By Mark Boslet, Of DOW JONES NEWSWIRES biz.yahoo.com PALO ALTO, Calif. (Dow Jones)--Novellus Systems Inc. stood by its third-quarter outlook Thursday and said on a conference call that the semiconductor industry had begun a tepid recovery. That recovery will include adding production capacity to a manufacturing base that has climbed above an 80% utilization rate, the company said, a threshold that in past recoveries has triggered a wave of equipment buying. However, as business continues to strengthen, customers this time show " hesitation and schizophrenia" when it comes to spending, said Chief Executive Richard Hill. He said many customers are adding capacity to existing plants rather than breaking ground for new ones. For the third-quarter, Novellus will break even after a charge of 4 cents a share, and post bookings of $220 million and shipments of $210 million, Hill said. This is exactly the outlook the company had offered when it released second-quarter numbers in July. Third-quarter revenue will be between $215 million and $220 million, Hill said. In July, Novellus had said revenue would come in at $220 million. Hill played down the modest difference. "We think we'll hit $220 million," he said. Despite the largely unchanged outlook, Wall Street investors were skittish. Some had hoped for a signs of an even more rapid expansion and sold shares in the wake of the conference call, pushing the stock down 2.6%, or $1.07, to $ 39.78 in after-market trading. The forecast was "very much in line" with the company's past projection, noted Morgan Stanley analyst Steven Pelayo. However, the suggestion of a "muted" recovery and the observation that business in North America and Europe is stable to down weighed on investors, said Pelayo, who doesn't own Novellus shares and whose firm doesn't performing banking business for the company. "Expectations were a little bit higher." During his conference call presentation, Hill tried to mix caution with optimism. There is a "fair bet we will see next year up," he said of the chip industry, even though the expansion will be slower rather than unbridled and fast. The industry meanwhile is moving more rapidly than expected to next-generation 300-mm production equipment, he said. Silicon wafers that have a diameter of 300 mm, or 12 inches, lower manufacturing costs because more chips can be produced on a wafer. Hill said the shift will lead to a $70 million charge at Novellus in the third quarter as the company writes down its inventory of 200-mm equipment. -By Mark Boslet, Dow Jones Newswires; 650-496-1366; mark.boslet@dowjones.com