Novellus Systems gets past estimates

Novellus Systems tiptoed past analysts' estimates in its first quarter Monday, earning $91.2 million, or 62 cents a share, on sales of $458.7 million.

First Call consensus expected the semiconductor-equipment maker to earn 61 cents a share on sales of $441.5 million.

Novellus (Nasdaq: NVLS) shares closed off $1.94 to $51.14 ahead of the earnings report before moving up to $52.35 in after-hours trading.

The $458.7 million in sales marks a 109 percent improvement from the year-ago period when it pocketed $23.8 million, or 17 cents a share, on sales of $220 million.

"Overall our operating results were good," said Chief Executive Officer Richard Hill during a conference call with analysts. "Bookings were off dramatically from the prior quarter but shipments were about what we expected."

Shipments in the first quarter fell to $413.1 million, down from $477.8 million last quarter, but they were up from $299.7 million in the year-ago quarter.

Gross profit margins in the quarter slipped to 55.6 percent, down from 57.2 percent last quarter.

Looking ahead, Hill said he expects shipments in the second quarter to fall around 40 percent from the first quarter.

In the latest sign of trouble for chip-equipment makers, Samsung Electronics reported stronger-than-expected earnings in its first quarter Monday, but said it would cut its capital expenditures by $914 million this year, roughly 16 percent.

Hill told analysts to expect sales of $379 million in the second quarter and earnings or 40 cents a share, in line with current analyst estimates.

"We look forward to maintaining profitability through this economic slowdown," Hill said. "We expect to emerge from this downturn in a better position than we were in going into it."

Ahead of the earnings report, ABN AMRO analyst Nikolay Tishchenko predicted Novellus would earn only 59 cents a share on sales of $443 million.

"We don't anticipate much of a recovery for chip or chip-equipment sales until sometime in the third or fourth quarter this year," he said. "I like the company and its product mix but no one should expect much from the stock for quite a while."

Last quarter, Novellus topped analysts' estimates when it raked in $104.4 million, or 76 cents a share, on sales of $425.1 million.

The San Jose, Calif.-based company ended the quarter with $1.2 billion in cash and equivalents, down $18.4 million from the previous quarter.

Novellus shares moved up to a 52-week high of $69.50 in July before falling to a low of $24.94 in November.

Seventeen of the 22 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.