Novellus Systems, Inc. Earnings Cheat Sheet: Margins Keep Growing, Net Income Climbs

S&P 500 (NYSE:SPY) component Novellus Systems, Inc. (NASDAQ:NVLS) reported its results for the second quarter. Novellus Systems, Inc develops, manufactures, sells and supports equipment used in the creation of chips and semiconductors.

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Novellus Systems Earnings Cheat Sheet for the Second Quarter

Results: Net income for the semiconductor equipment and materials company rose to $64.7 million (79 cents per share) vs. $63.3 million (66 cents per share) in the same quarter a year earlier. This marks a rise of 2.3% from the year earlier quarter.

Revenue: Rose 9% to $350.2 million from the year earlier quarter.

Actual vs. Wall St. Expectations: NVLS beat the mean estimate of 76 cents per share. Estimates ranged from 75 cents per share to 79 cents per share. Analysts were expecting revenue of $352.3 million.

Quoting Management: Richard S. Hill, Chairman and Chief Executive Officer, said, “We’re extremely proud to have been voted by our customers as one of the two highest ranked semiconductor capital equipment companies among our peer group in VLSI’s 2010 customer satisfaction survey. We achieved this by focusing on the customer experience and continuously improving the technology, productivity and reliability of our tools. We also continue to generate a pipeline of products targeted to our customers’ needs with the right mix of technology and productivity, which has resulted in consistent market share gains in both our core semiconductor business and the new market opportunities in advanced wafer level packaging.” Hill added, “We intend to drive further gains and revenue growth with the emergence of 3D NAND and advanced logic applications, all of which are essential building blocks required to enable the growth in cloud computing and storage.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.5 percentage points to 50.3% from the year earlier quarter. Over that span, margins have grown on average 7.9 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 49.6% to $413.2 million in the first quarter. The figure rose 57.4% in the fourth quarter of the last fiscal year from the year earlier and climbed more than twofold in the third quarter of the last fiscal year from the year-ago quarter.

Competitors to Watch: Mattson Technology, Inc. (NASDAQ:MTSN), Amtech Systems, Inc. (NASDAQ:ASYS), Applied Materials, Inc. (NASDAQ:AMAT), Axcelis Technologies, Inc. (NASDAQ:ACLS), CVD Equipment Corporation (NASDAQ:CVV), Tegal Corporation (NASDAQ:TGAL), ASM Intl. N.V. (NASDAQ:ASMI), Varian Semiconductor (NASDAQ:VSEA), Lam Research Corporation (NASDAQ:LRCX), and FSI International, Inc. (NASDAQ:FSII).

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(Source: Xignite Financials)