Novellus Systems Inc. Earnings: Revenue and Profit Decline

S&P 500 (NYSE:SPY) component Novellus Systems Inc. (NASDAQ:NVLS) posted a decrease in profit as revenue declined. Novellus Systems 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 Fourth Quarter

Results: Net income for the semiconductor equipment and materials company fell to $38.5 million (56 cents per share) vs. $81.5 million (89 cents per share) a year earlier. This is a decline of 52.8% from the year earlier quarter.

Revenue: Fell 26.4% to $282.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Novellus Systems Inc. reported adjusted net income of 45 cents per share. By that measure, the company fell short of mean estimate of 47 cents per share. Analysts were expecting revenue of $277.3 million.

Quoting Management: Richard S. Hill, Chairman and Chief Executive Officer, said, “Despite the slowdown in the second half of 2011 we turned in solid performance for the year. Our intense focus on developing the right products at the right time has allowed us to continue to improve operating leverage and we believe positions us for the next wave of technology transitions in the semiconductor industry. As we previously announced, Novellus and Lam Research are combining companies, creating a semiconductor equipment company that is expected to lead the development of next-generation semiconductor manufacturing technology. We are very excited about this unique opportunity to join two outstanding organizations into one transformative company.”

Key Stats:

The company has now seen net income fall in each of the last two quarters. In the third quarter, net income fell 33% from the year earlier quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by 4 cents, and in the second quarter, it was ahead by 3 cents.

Revenue has fallen in the past two quarters. In the third quarter, revenue declined 16.5% to $306.7 million from the year earlier quarter.

The company’s cost of sales fell 20.9% from a year earlier to $150.5 million. Last quarter, cost of sales was 53.2% or revenue versus 49.5% a year earlier.

Looking Forward: Analysts have a more positive outlook about the company’s results for next quarter. The average estimate for first quarter of the next fiscal year is 52 cents per share, an increase from 46 cents sixty days ago. The average estimate for the fiscal year is $3.06 per share, falling from $3.07 thirty days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com