boosted its second-quarter revenue and profit forecast, citing improved efficiencies within the company and strong industrywide demand for memory chips.
Following the announcement, shares of Novellus rose $1.16, or 5.2%, to $23.61 on Instinet.
In a midquarter update after Wednesday's market close, Novellus said sales in the second quarter will range between $400 million and $410 million, vs. its previous estimate of $370 million to $380 million.
Earnings per share will be between 37 cents and 40 cents, compared with its initial guidance of 26 cents to 28 cents.
Analysts polled by Thomson First Call were looking for Novellus to ring up $378.4 million in sales with EPS of 28 cents.
"As you can tell from the midquarter update, we're making progress on our operation plans, our product-quality improvements and overall execution," said CEO Richard Hill in a conference call with analysts.
Hill said the semiconductor-equipment industry was on track to grow in the second half of 2006 compared to the first half of the year. But he said the rate of growth would not be as high as that logged in the first half of the year vs. the end of 2005.
"The drivers in the industry continue to be flash and DRAM," said Hill. "But we are also seeing expansion of capacity within the foundries. Asia and the U.S. continue to drive this expansion."
Novellus also raised its gross margin projection for the second quarter to 49%, compared to its earlier projection of 48%, as a result of reductions in warranty and material costs, among other things.