DOW JONES NEWSWIRES
Three semiconductor companies reported fourth-quarter losses
amid the slumping demand firms across the industry have warned of
the past several months.
Atmel Corp. (ATML) separately said it is pursuing a possible
sale of its underperforming ASIC business, which makes SmartCard
products, so it can focus on its core microcontroller business.
Atmel, ON Semiconductor Corp. (ONNN) and Novellus Systems Inc.
(NVLS) have cut jobs and made other cost-cutting moves of late as
the industry struggles to "resize" itself for what may be a smaller
market for tech products.
Atmel Swings To Net Loss
The chip maker reported a net loss of $24.4 million, or 5 cents
a share, compared with year-earlier net income of $1.7 million. It
was its third consecutive quarterly loss. Excluding items including
acquisition- and restructuring-related costs, earnings fell to 1
cent a share from 4 cents.
Revenue dropped 21% to $334.6 million. In December, Atmel cut
its revenue forecast to a decline of 12% to 18% from the third
quarter's $400 million.
Analysts most recently estimated a loss of 3 cents a share on
revenue of $338.6 million, according to a poll by Thomson
Reuters.
Gross margin rose to 39.7% from 35.2%.
In December, Atmel said it would cut its North American work
force by 11% and close nonmanufacturing facilities for 10 days to
cut costs. The job cuts are expected to result in savings of $18
million a year.
Atmel, which makes chips used in products ranging from cars to
touch-screen displays, was the object of a $2.3 billion takeover
offer from Microchip Technology Inc. (MCHP) and ON that Atmel
rejected. ON withdrew from the proposal in November, citing the
worsening semiconductor market. Microchip also walked away from the
bid.
Looking ahead, Atmel said economic uncertainty prevented it from
issuing guidance but for internal purposes is planning on
first-quarter revenue of $290 million. Analysts estimated $308.9
million.
Atmel's shares were flat after hours at $3.48. The stock price
has fallen 26% the past three months.
ON Semi Swings To Loss On Goodwill Write-Down
ON reported a net loss of $519.6 million, or $1.27 a share,
compared with year-earlier net income of $61.1 million, or 20 cents
a share, a year earlier. The latest results included a $557.4
million goodwill write-down; excluding that and other items,
earnings fell to 15 cents a share from 23 cents. Analysts on
average expected a 9-cent profit.
Revenue climbed 20% to $488.7 million. Last month, the chip
maker cut its revenue forecast to $480 million to $490 million.
Gross margin rose to 38% from 37.3% as inventories grew 52%.
Average selling prices on a mix-adjusted basis were flat with the
third quarter.
ON - which makes audio and power-management chips used in mobile
phones, cars and portable electronics - has cut capital spending
and plans to lay off 1,500 workers, eliminate bonuses, freeze
hiring and require employees to take unpaid leave. The company will
also shut plants for four to six weeks in the coming months and
take other steps that Chief Executive Keith Jackson said should
keep ON free-cash-flow positive.
Looking ahead, ON Semi expects first-quarter revenue of $340
million to $380 million. Analysts expected $411.2 million.
ON shares were down a penny after hours at $4.26; the stock is
down 60% the past six months.
Novellus Swings To Net Loss
The chip-equipment maker reported a net loss of $130.3 million,
or $1.36 a share, compared with year-earlier net income of $52.9
million, or 47 cents a share. Excluding a $99.5 million goodwill
write-down at its industrial-applications business and
restructuring costs, the quarter's loss would have been 21
cents.
Revenue slumped 48% for the semiconductor-equipment maker to
$188.5 million.
The results fell short of the warning given in December, when
Novellus cited weakness in the memory chip sector, but were largely
in line with analysts' latest estimate.
Gross margin slumped far more than expected to 36.4% from 47.3%
amid the sales slump.
Bookings slumped 41% during the quarter, while shipments dropped
24% and backlog is now nearly half that of a year earlier.
Noting the company is experiencing "unprecedented challenges"
and that there are many things out of its control, Chairman and
Chief Executive Rick Hill said the company is focused on things
like cost-containment. In December, the maker of
semiconductor-manufacturing tools said it would cut its global work
force 10% by the end of January.
Novellus shares rose 1.5% after hours to $13.98. The stock is
down 40% the past six months.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
kathy.shwiff@dowjones.com