Semiconductor equipment maker Novellus Systems, Inc. (NVLS), Wednesday reported a profit for the fourth quarter from a loss last year, benefiting from higher sales, margins and shipments, as well as lower operating expenses. Earnings for the quarter came in short of analysts' estimates by 6 cents, while revenues topped.
The San Jose, California-based company's net income for the fourth quarter was $35.19 million or $0.36 per share, compared to a loss of $130.25 million or $1.36 per share in the previous year. Results for the quarter include charges on consolidation of manufacturing in Oregon of $0.03 per share, charges related to the reductions in workforce of $0.01 per share and tax effect of the charges of $0.01 per share.
On an adjusted basis, net income was $38.23 million or $0.39 per share, compared to a loss of $19.99 million or $0.21 per share in the previous year.
On average, 15 analysts polled by Thomson Reuters expected the company to report a profit of $0.33 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter rose 29.6% to $244.19 million from $188.45 million last year. Analysts expected revenue of $237.09 million for the quarter.
In the preceding third quarter, the company reported a turn to loss, reflecting a significant decline in net sales. Net loss for the third quarter was $4.03 million or $0.04 per share, compared to a profit of $1.40 million or $0.01 per share a year earlier. Excluding certain charges, net loss was $2.51 million or $0.03 per share, compared to net income of $2.79 million or $0.03 per share in the same period last year. Net sales dropped to $176.88 million from $250.10 million in the year-ago period.
Gross profit was $113.64 million or 46.5% of net sales, compared to $68.52 million or 36.4% of net sales in the comparable quarter a year ago.
Total operating expenses declined to $75.57 million from $202.44 million in the previous year. Selling, general and administrative expenses were $38.56 million, down from $50.38 million a year ago. Research and development expenses declined to $36.73 million from $37.01 million last year.
Restructuring and other charges were $0.28 million, compared to $1.68 million a year ago. The company recorded an impairment of goodwill of $99.52 million in the fourth quarter of the previous year.
Other income for the quarter was $2.52 million, compared to an expense of $4.16 million in the comparable quarter last year.
Bookings in the fourth quarter were $257.6 million, up 50.2% from third quarter 2009 bookings of $171.5 million. Shipments of $244.5 million in fourth quarter 2009 indicated an increase of 47.8% from $165.4 million reported for the third quarter of 2009. Deferred revenue at the end of the fourth quarter was $35.9 million, an increase 11.1% from $32.3 million at the end of the third quarter of 2009.
For the fiscal year 2009, net loss narrowed to $85.23 million or $0.88 per share from $115.71 million or $1.18 per share in the previous year. Adjusted net loss was $49.1 million or $0.51 per share, compared to an income of $7.1 million or $0.07 per share last year. Net sales for the year declined 36.8% to $398.10 million from $575.06 million a year ago.
Analysts expected a loss of $0.57 per share on revenues of $631.33 million for the full year.
Richard Hill, chairman and chief executive officer said, "I'm pleased to report that efforts to restore our business model have paid off, and we ended a very difficult year with solid financial performance in the fourth quarter. Our increased operating leverage will enable us to drive for greater profitability cycle to cycle."
Amongst others in the industry, Lam Research Corp. (LRCX), previously reported a profit for the second quarter of $69.57 million or $0.54 per share, compared to a loss of $24.17 million or $0.19 per share in the same quarter a year ago, helped by higher margins, improved shipments and strong revenues. Ongoing net income was $60.7 million or $0.47 per share in the quarter, compared to ongoing net loss of $11.7 million or $0.09 per share in the year-ago quarter. Revenue surged to $487.18 million from $283.41 million in the year-ago quarter.
Another competitor Mattson Technology, Inc. (MTSN), today reported a net loss for the fourth quarter of $11.4 million or $0.23 per share, compared to a loss of $60.5 million or $1.22 per share last year, reflecting higher revenues and lower operating expenses. Net sales were $17.9 million, compared to $13.1 million in the fourth quarter of 2008.
"We believe the continued momentum behind the recovery in our industry is sustainable, as it is based on the return of fundamental end market demand drivers similar to the ones we saw a decade ago. While the future is never certain, we expect to see continued growth in semiconductor demand, which ultimately drives our business," Hill said looking ahead.
NVLS closed Wednesday's regular trading at $22.05, up 0.29 or 1.33%, on a volume 4.52 million shares on the Nasdaq. In after hours, the stock declined 0.16 or 0.73%, trading at $21.89. In the past 52-week period, the stock traded in a range between $11.43 and $26.00, on a 3-month average volume of 2.45 million shares.
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