Monday, Varian Semiconductor Equipment Associates, Inc. (VSEA), a producer of ion implantation equipment for semiconductor industry, lowered the revenue guidance for the first quarter, citing the deteriorating capital equipment market and sharper than anticipated decline in sale of equipment and non-systems business, including spare parts sales. Further, the company issued a loss per share forecast for the quarter.
For the first quarter, Gloucester, Massachusetts-based Varian expects loss per share to range between $0.18 and $0.22, including restructuring charge. The company expects a restructuring charge of approximately $5 million for the quarter.
Ten analysts polled by First Call/Thomson Financial currently expect a loss of $0.05 per share. Analysts' estimates typically exclude special items.
For the quarter, the company now expects revenues in the range of $105 million - $110 million, down from earlier forecast of $115 million - $125 million. Nine analysts' consensus estimate for revenue is $107.37 million for the quarter.
Operating loss for the quarter is expected to be $14 million - $16 million, or $9 million - $11 million excluding restructuring charge.
Meanwhile, Varian lowered its first quarter outlook for gross margins to a range of 37% - 38% from the earlier guidance of 40% - 40.5%.
Robert Halliday, chief financial officer of Varian, said, "The shortfall in forecasted quarterly revenue, particularly the reduction in sales of spares and upgrades, continues to pressure quarterly gross margin and earnings projections."
The company said that in order to better position itself in light of the current economic downtrend, it expects to further reduce its quarterly operating expenses, before restructuring expenses, from $59.9 million in the previous quarter to about $50.0 million in the quarter ended January 2, 2009, and to approximately $45.5 million in the quarter ending April 3, 2009.
VSEA closed Friday's trading at $18.61 on the Nasdaq.
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