Cabot Trims Margin Forecast

The chip equipment maker also puts fourth-quarter revenue below Wall Street's expectation.
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Cabot Microelectronics

(CCMP) - Get Report

lowered its fiscal fourth-quarter margin forecasts Thursday and put revenue for the period slightly below Wall Street's projection.

The company, a maker of slurries for the semiconductor industry, now expects a gross profit margin of 44% to 45% for fourth quarter ended Sept. 30. The company's guidance in July called for margins of 46% to 50%.

The company expects revenue of $86 million to $87 million for the quarter. Analysts polled by Thomson First Call have an average estimate for revenue of $88.69 million.

Cabot also expects to write off about $1.8 million of assets. The write-off is expected to increase cost of goods sold by about $1.1 million and increase research and development expense by around 700,000 in the fourth quarter.

About $600,000 of amortization expense will be recorded as cost of goods sold in the quarter, as well as in each quarter of fiscal 2007, the Aurora, Ill.-based company said.

"During 2006 we continued to strengthen our business by executing our three strategic initiatives: technology leadership, operations excellence and connecting with customers," the company said. "Demand for our CMP slurries in fiscal 2006 was strong and we continue to establish our pads business. We are also encouraged by our progress growing in areas adjacent to our core CMP business, as with the QED acquisition."

Cabot shares were trading down 83 cents or 2.7%, at $30.42 Thursday.

This story was created through a joint venture between and IRIS.