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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Big Bucks who wrote (14872)	1/20/1998 12:27:00 AM
From: William Griffin	Read Replies (1) \| Respond to of 70976

Seems like WS does not want to put a positive spin on any news on this sector. Dow Jones Newswires -- January 19, 1998 Despite Good 4Q,Street May Cut Novellus Views On Asia Worry By Christopher Grimes NEW YORK (Dow Jones)--Novellus Systems Inc. (NVLS) posted solid earnings and exceeded Wall Street's forecasts for the fourth quarter, but economic conditions in Asia forced company officials to contain their enthusiasm. Novellus, a San Jose, Calif.-based company that makes equipment used to manufacture semiconductors, does about 25% of its business in Asia. And the Asian flu rubbed off on the company in the last two weeks of the fourth quarter, as some of Novellus' customers in the region couldn't get credit to buy new equipment. Since then, those companies have gotten the go-ahead to pay for expanding their plants, but Novellus officials remain very cautious about the environment in the region. "We are projecting an expectation of flat revenues (in the first quarter), as the Asian crisis puts a question mark on how the year is going to turn out," said Richard Hill, chairman and chief executive of Novellus. Needham & Co. analyst John Pitzer said he expects Wall Street to lower per-share estimates on Novellus to reflect the first-quarter outlook. Hill described the company's outlook as "conservative" in the near term, but he said he remains enthusiastic about the market's long-term prospects. Novellus is just one of many chip-equipment companies whose stock has been battered since the economic downturn in Asia. It reached a year-high of 66 3/8 Oct. 13, accounting for a 2-for-1 stock split, but closed Friday at 31 1/4. So investors were curious to hear the company's tone about its business in 1998. While officials were cautious about Asia, they did make positive "undertones," Pitzer said. The company was very enthusiastic about recent estimates by large U.S. semiconductor companies, which are expected to spend more on equipment than originally projected. Hill noted that Motorola Inc. (MOT), Intel Corp. (INTC) and Advanced Micro Devices Inc. (AMD) each announced last week that their capital-spending figures would be ahead of previous forecasts. Semiconductor companies in the U.S. make up 40% of Novellus' business, he said. Pitzer said investors probably are still going to be skittish about putting money into this part of the technology sector for a while. "I think Novellus has reason to be more positive than most of its competitors," Pitzer said. "(But) I still think investors are fearful for the second shoe to drop out of Asia." For the fourth quarter of 1997, Novellus earned 64 cents a share on sales of $162.8 million, compared with 51 cents a share on sales of $104.6 million. That slightly exceeded Wall Street's estimate of 63 cents a share as tallied by First Call Corp. - By Christopher Grimes; 201-938-5253