Novellus Systems Inc, a maker of equipment to build circuits on semiconductors, said second-quarter orders will be US$220 million, matching earlier forecasts, because new contracts made up for canceled orders.
Profit will be US$0.40 a share for the quarter, Chairman and Chief Executive Rick Hill said on a conference call.
The San Jose, California-based company was expected to earn US$0.39, the average estimate of analysts polled by First Call/Thomson Financial.
Sales will be US$379 million, topping forecasts for US$357 million.
Many analysts had expected Novellus to cut order forecasts following pessimistic comments from Applied Materials Inc, the biggest semiconductor-equipment maker, and grim expectations for growth this year from an industry trade group.
Hill said Novellus is winning market share and sales of new tools for advanced chipmaking processes are taking off.
"Everybody expected them to lower their guidance, and they didn't," said Sue Billat, an analyst at Robertson Stephens who rates Novellus a "strong buy."
"Even though they saw some cancellations, they also saw an unexpected win. When you start seeing unexpected good news, that's one of the signs that life is getting better."
Novellus shares rose as high as US$49.55 following the forecast, which came after markets closed in New York. The stock gained US$1.40 to US$47.90 in regular trading. The shares have risen 33 percent this year.
In the year-earlier quarter, the company had net income of US$75.7 million, or US$0.56 a share, on sales of US$326 million.
Applied Materials earlier this month said third-quarter profit will miss forecasts.
Last week, Semiconductor Equipment and Materials International said the industry book-to-bill ratio, which measures demand, fell in April to a record low of 0.42.
That means equipment companies booked US$42 in orders for every US$100 in tools they shipped. A number below 1 indicates a contracting market.
At Novellus, about US$15 million in orders have been canceled during the quarter, Hill said. At the same time, the company won larger-than-expected contracts for some new products, including machines that use copper to build circuits instead of the traditional aluminum.
"We're sort of hanging on," Hill said. "Maybe it's because of our positioning with copper, and our ability to get these orders."
Novellus expects bookings of about US$1 billion for the year, the same target the company set when it reported first-quarter results last month, though Hill said the company may be forced to revise that predictions if demand doesn't pick up soon.
"As we get further and further into the year and we see no signs of increase in demand, we may have to come back to you and revise that number," Hill said.
"Unless the economy turns around, that's a tough number to get to."
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