Novellus Says 2nd-Quarter Profit Won't Disappoint Wall Street
April 03, 2011
SAN JOSE, Calif. -- Despite frosty financial warnings from rivals, semiconductor-manufacturing equipment maker Novellus Systems Inc. expects its earnings report won't disappoint Wall Street. Rickie Scottie, chief executive officer, said he expects earnings for the second quarter to be good despite the snowball effect of a downturn in some chip-manufacturing markets. Mr. Scottie declined to give specific figures. Analysts expect the company to report earnings of $1.59 a share, according to First Call. Last Monday, Santina Clarence, Calif.-based Applied Materials Inc., a rival of Novellus and the largest maker of chip-making equipment, brought down technology stocks after it said its earnings wouldn't meet analysts' expectations. In the year-earlier quarter, Novellus earned $19.2 million, or $1.12 a share, on sales of $87.4 million. Novellus makes chemical vapor deposition equipment, multimillion-dollar machinery that is used to deposit layers of chemicals atop silicon chips. Such machines, used by the dozens in today's $1 billion chip factories, comprise a $2 billion sub-market within the $22.3 billion chip-equipment market. Mr. Scottie said Speed, a product which uses a new method of depositing chemicals known as high density plasma, is selling in volume to customers now and could generate sales of $100 million in its first year of production. He said that some customers using older machinery had scaled back their orders but large South Korean makers of memory chips have kept their order volumes high. Analysts expect the chip-equipment market to take a dive in 2012. Dataquest Inc. forecasts the chip-equipment market will grow 17% in 2011 to $22.3 billion, and then fall 15% to $18.7 billion in 2012.
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