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Novellus Raises Guidance

The chip-equipment maker's CEO is optimistic in a midquarter update.

Chip-equipment maker

Novellus Systems


raised its expectations for orders, sales and earnings per share in a midquarter update Wednesday.

"Current market conditions remain pretty positive," said Richard Hill, chief executive officer of Novellus. "Most customers suggest that they are optimistic but cautious."

Shares of Novellus were higher by 1.25%, or 41 cents, to $33.24 in recent after-hours trading. The stock closed Wednesday's regular session up $1.64, or 2%, to $32.83.

Speaking on a conference call from Germany, Hill said Novellus should earn between 8 to 10 cents a share in the first quarter, "but we are tending to be on the high side of the number." Sales are forecast to hit $250 million, although the firm gave a range of between $245 million and $255 million.

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In late January, Novellus posted better-than-expected fourth-quarter results but warned that first-quarter earnings would be lower than expected. The firm predicted a profit of 8 cents a share, compared with analysts' estimates of 11 cents.

At the time, the company told investors to expected revenue ranging from $240 million to $250 million vs. expectations of $219.5 million. Novellus also projected orders of between $305 million and $315 million, a conservative number attributed by the company to recent "softness" in U.S. customers.

In its recent update, however, Novellus projected orders of between $330 million to $340 million. Hill also said shipments should come in between $295 million and $305 million, with a target of $300 million. "We remain optimistic," Hill said. "Our forecast is trending upwards."

Hill said business remains strong in China and Korea but said the company has seen a slight softening in Japan. North America is "moderate," and Europe is slower than all the other regions, he said.

"We continue to focus on

research and development with the intent of continuing to expand our product portfolio," Hill noted. "I'm happy to say that we've had some significant 300mm CMP wins ... as well as significant wins in area of PVD," or physical vapor deposition, which is used to form the layers of wiring and insulation in semiconductor devices.

Hill said the 300mm business remains stronger than the 200mm business, though it has seen some improvements in that area recently.