Applied Materials (AMAT) - Get Applied Materials, Inc. Report was down 4.8% in preopen Island trading as chip stocks took a beating.

In comments Monday Applied Materials refused to reaffirm earnings guidance for upcoming quarters and indicated the drop in sales had been steeper than previously believed.

Also Monday, a report by

Semiconductor Equipment and Materials International

predicted the industry would fall by 35% this year compared to 2000, and will not pass last year's levels until 2004.

Chip equipment maker



posted earnings after the close Monday of 40 cents a share, down from 54 cents a year ago, on a 3.6% rise in sales to $364 million. Analysts were expecting 39 cents a share, according to

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Thomson Financial/First Call


Shares of Novellus were down 6.8%.

Ahead of its own earnings report, due out after the close today,


(INTC) - Get Intel Corporation (INTC) Report

was down 1.7%. Intel is expected to post earnings of 10 cents a share, on revenue of about $6.3 billion for the second quarter, down from 50 cents a share on revenue of $8.3 billion in the year-ago quarter, according to

Thomson Financial/First Call


An indication of how Intel's current quarter is shaping up is also expected. Analysts are forecasting earnings of 12 cents a share on revenue of $6.5 billion for the third quarter.