Novellus, Entropic: Ratings Changes

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BOSTON (TheStreet) -- TheStreet.com's stock-rating model upgraded Novellus Systems(NVLS Quote), a maker of semiconductor-manufacturing equipment, to "hold."

The numbers: The company's second-quarter loss widened to $50 million, or 52 cents a share, from a loss of $2.4 million, or 2 cents a share, in the year-earlier period. Revenue declined 54% to $119 million. Its gross margin dropped from 52% to 43% and its operating margin fell from 1% into negative territory. A quick ratio of 3.7 demonstrates outstanding liquidity. A debt-to-equity ratio of 0.1 indicates modest leverage.

The stock: Novellus Systems is up 61% this year, more than major U.S. indices. The company has posted losses for three consecutive quarters. The stock doesn't pay dividends.

The model upgraded semiconductor maker Entropic Communications(ENTR Quote) to "hold."

The numbers: The company's second-quarter loss narrowed to $4.3 million, or 6 cents a share, from a loss of $6.5 million, or 10 cents a share, in the year-earlier period. Revenue fell 39% to $26 million. Its gross margin rose from 50% to 54%, but its operating margin remained in negative territory. The company has an ideal financial position, with $32 million of cash and no debt.

The stock: Entropic Communications has surged 378% this year, outpacing major U.S. indices. The company has posted losses for six consecutive quarters. The stock doesn't pay dividends.

-- Reported by Jake Lynch in Boston.