February 4, 2009 / 11:25 PM / 10 years ago

WRAPUP 1-Novellus, On Semi, Atmel post quarterly loss

* Novellus, On Semi, Atmel shares down

* Novellus Q4 sales drop 48 pct

* On Semi sees Q1 rev below Street

By Purwa Naveen Raman

Feb 4 (Reuters) - Chip technology companies ON Semiconductor Corp ONNN.O, Novellus Systems Inc NVLS.O and Atmel Corp ATML.O reported a quarterly loss, as the economy continued to cast a pall of gloom over the semiconductor sector.

Semiconductor companies around the world are struggling a near two-year sector downturn due to chronic oversupply and weak demand for consumer electronic gadgets, forcing them to resort to job cuts and factory shutdowns.

Chipmaker On Semiconductor said it would close its remaining Phoenix wafer-fab facility by the end of the first quarter 2010, and expects to cut 350 jobs at the unit.

All three companies have already announced a slew of measures to cut costs, including reductions workforce.

“There is great uncertainty in the outlook for the worldwide economy, which is out of our control,” Novellus Systems Chief Executive Richard Hill said in a statement.

Technology research firm Gartner expects a 16 percent decline in semiconductor revenues this year to $219 billion, as prices as well as volumes fall.


Novellus, which makes semiconductor manufacturing tools, posted a wider-than-expected loss, hurt by a non-cash impairment charge of $99.5 million. [ID:nN04315020].

For the fourth quarter, Novellus lost $130.3 million, or $1.36 per share, compared with a profit of $52.9 million, or 47 cents per share, in the year-earlier period.

Recent industry data showed North American manufacturers of equipment used to make semiconductors reported a 15 percent sequential decline in orders in December.

According to Semiconductor Equipment and Materials International (SEMI), the book-to-bill ratio was 0.93 in December, meaning that $93 worth of orders were received for every $100 of product shipped.

Shares of Novellus, which competes with Applied Materials Inc (AMAT.O) and Lam Research Corp (LRCX.O), have nearly halved since their year-high level of $25.47 in February 2008.

They were trading down 5 percent in trading after the bell, after They had closed at $13.77 Wednesday on Nasdaq.


On Semi posted a quarterly net loss, hurt by a one-time charge of $1.42 per share that was largely due to goodwill impairment, and forecast first-quarter revenue below market estimates.

The company posted fourth-quarter net loss of $519.6 million, or $1.27 per share, compared with net income of $61.1 million, or 20 cents a share, a year ago.

Excluding items, earnings were 15 cents a share. Revenue rose 20 percent to $488.7 million. [ID:nWNAB8288]

On Semi expects first-quarter revenue of about $340 million to $380 million, well below analysts’ expectations of $412.7 million.

“This was kind of expected given that automotive, consumer and computing segments are all down 25 percent into the March quarter for most analog companies,” ThinkEquity analyst Vijay Rakesh said by phone.

Shares of On Semi, which competes with National Semiconductor NSM.N and STMicroelectronics NV (STM.PA), fell 1.6 percent to $4.20 in trading after the bell. They had closed at $4.27 Wednesday on Nasdaq.

Chipmaker Atmel ATML.O, which recently rejected a buyout offer from On Semi and Microchip Technology Inc (MCHP.O), posted wider-than-expected loss and said it was “planning” first-quarter revenue of about $290 million. Analysts are expecting revenue of $308.95 million.

Separately, the company said it hired Morgan Stanley to help it explore “strategic alternatives” for one of its chip businesses. [ID:nN04306546]

Shares of Atmel fell 4 percent in trading after the bell, after closing at $3.48 Wednesday on Nasdaq. (Editing by Saumyadeb Chakrabarty)

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