Reflecting the challenging business conditions, semiconductor equipment maker Novellus Systems Inc. (NVLS) Monday reported a second quarter loss, hurt by charges, as well as a 38.1% decline in sales.
The San Jose, California-based company reported a net loss of $2.39 million or $0.02 per share for the second quarter of 2008, compared to net income of $57.35 million or $0.45 per share reported for the year-ago period. Results of the just concluded quarter include $13.6 million of impairment and severance charges.
Second quarter 2008 net income excluding items was $6.21 million or $0.06 per share. Excluding certain unusual charges, second quarter 2007 net income was $57.53 million or $0.45 per share. On average, 20 analysts polled by First Call/Thomson Financial expected earnings of $0.04 per share for the quarter.
Gross profit declined to 43.1% from 50% a year ago. Quarterly net sales decreased to $257.7 million from $416.3 million reported for the second quarter of 2007, yet exceeded Street expectation of $251.54 million.
Chipmakers in general are going through tough times due to an industry-wide glut. Novellus said bookings for the second quarter of 2008 declined 21% to $234.6 million from first quarter 2008 bookings of $297.0 million. Shipments decreased 23.2% sequentially to $240.3 million. Deferred revenue at the end of the second quarter was $95.7 million, down from $115.7 million at the end of the first quarter of 2008.
Year-to-date, net income plummeted to $13.14 million or $0.13 per share from $111.13 million or $0.88 per share reported in the year-ago period. Net sales for the six-month-period dropped to $572.45 million from $813.31 million.
Cash and cash equivalents and short-term investments at the end of June 28 2008 was $428.81 million, while it was $596.77 million at the end of December 31, 2007. Inventories for both periods were $229.12 million and $213.0 million, respectively.
According to Richard Hill, Chairman and Chief Executive Officer of the company, "We have introduced products over the last year which dovetail with these developing industry trends and while market share gains have been muted due to the cyclical downturn, we expect the gains will be magnified when we emerge from this current cycle."
Among others in the industry, Applied Materials Inc. (AMAT) is scheduled to announce third quarter results next month. The Street looks for earnings of $0.14 per share on revenues of $1.84 billion.
KLA-Tencor Corp. (KLAC), one of the five largest semiconductor equipment companies in the world, is shortly expected to report fourth quarter profit of $0.58 per share on revenues of $573.61 million.
NVLS closed Monday's regular trading session at $19.49, up $0.33 or 1.72%, on 8 million shares. The stock dropped 19 cents in the post-close trade. For the past year, the stock trended in the range of $18.89-$33.48.
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