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Most technology stocks are being dragged down again today after a gloomy statement from Advanced Micro Devices Inc. (NYSE: AMD) stirred new worries over the tumbling economy. Novellus Systems Inc. (NASDAQ: NVLS) is joining the market anxiety after issuing a warning related to its earnings numbers. The company slashed its first-quarter earnings outlook, and said it expects revenues at the low end of the earlier expected range.
The semiconductor equipment maker now expects first-quarter earnings in a range between 15 cents and 17 cents per share, down from its previous range of 21 to 24 cents. Quarterly revenues are expected to be at the low end of the previously communicated range of $315 million and $325 million. Analysts were waiting for Novellus Systems show quarterly earnings of 23 cents a share on sales of $319.4 million, according to Reuters Estimates.
The company blamed difficult market conditions which put a curb on consumer spending for memory chips. Novellus also cited higher manufacturing spending and a bigger-than-expected tax rate. A company executive stated that the bad situation the microchip manufacturing equipment maker has to face is "a combination both of what's happening in the market place and a self inflicted wound."
The company's warning came as a sign of another negative effect of the current economic uncertainty. Wall Street has reacted by pushing the stock down 7.01% to $22.14 in today's trading.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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