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Novellus Systems


reiterated its cautious view of the fourth quarter Tuesday but said its results will fall at the high end of previous targets, surpassing previously reduced analysts' estimates.

"We don't see anything we would project as a precipitous decline, but as we have reiterated before, we see the fourth quarter down from third quarter," said Chief Executive Officer Rick Hill during a postclose conference call.

However, the San Jose, Calif.-based chip-equipment maker now expects fourth-quarter revenue to range from $325 million to $330 million, at the high end of the initial range of $300 million to $330 million and higher than the consensus analysts' estimate gathered by Thomson First Call, which pegged revenue at $320.8 million. Earnings per share should total 24 cents to 26 cents, also at the top end of earlier guidance of 19 cents to 26 cents a share and above the consensus estimate of 21 cents a share.

Analysts, however, had ratcheted down their targets significantly in response to the disappointing fourth-quarter guidance from Novellus last month. Previously, analysts were expecting the company to earn 37 cents a share on $410.3 million in revenue for the fourth quarter.

The company expects fourth-quarter bookings to range from $325 million to $330 million -- at the high end of a previous range of between $320 million and $330 million. The company anticipates shipments will be about $330 million -- at the high end of the previous guidance ranging from $315 million to $330 million.

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While declining to say too much about future quarters, Hill suggested future results should remain at current levels, rather than falling further. "I think we're settling out somewhere in this area," he said.

Novellus' relatively lackluster update comes on the heels of an unexpected 35%

order slide forecast by rival

Applied Materials

(AMAT) - Get Applied Materials, Inc. Report

, the world's largest chip-equipment maker, for its fiscal first quarter. Applied said it was entering a period of lower capital investment as customers focus on reducing chip inventories.

After the bell, shares of Novellus rose 41 cents, or 1.5%, to $27.35 in recent trading. Novellus shares closed down 85 cents, or 3.1%, at $26.94.