Novellus' outlook lifts chip-equipment stocks

Pls keep eyes on this group which in my mind will have a great show in this ER season.

hip-equipment stocks surged Tuesday, with Novellus Systems Inc. shares climbing 11% after the company offered a stronger order forecast than analysts had anticipated.
San Jose, Calif.-based Novellus said its bookings for the quarter ending in September would be flat to 5% higher than the three months ended June 30. The forecast pegs its bookings in the range of $316 million to $349 million.
Novellus (NVLS :
NVLS33.03, +3.34, +11.2% ) shares rose $3.34, or more than 11%, to close at $33.03 after reporting on Monday second-quarter earnings and revenue that beat Wall Street analysts' forecasts. Novellus earned $57.3 million, or 45 cents a share, on revenue of $416.3 million, while analysts had forecast Novellus to earn 43 cents a share on $413.13 million in sales.
Other chip-equipment makers followed Novellus north, with Lam Research Corp. (LRCX :
Lam Research Corporation
LRCX59.98, +5.53, +10.2% ) rising $5.53, or more than 10%, to $59.98, Varian Semiconductor Equipment (VSEA :
varian semiconductor equipmnt com
VSEA44.74, +4.03, +9.9% ) up $4.03, or almost 10%, to close at $44.74 and KLA-Tencor Corp. (KLAC :
KLA-Tencor Corporation
KLAC61.78, +5.08, +9.0% ) up $5.08, or almost 9%, to end the day at $61.78 a share.
More signs of market conditions could come this week, with all the companies scheduled to update analysts at Semicon West, the industry's trade show held in San Francisco.
Novellus noted that "several memory chipmakers were in the process of re-evaluating capacity needs, and the results of this analysis could have implications to bookings in the quarter," wrote Deutsche Bank analyst Steve O'Rourke, who maintained his sell rating on Novellus shares.
The direction of industry sales this year and into 2008 likely will be tied to spending for equipment to make DRAM memory chips used in PCs and NAND flash chips, which are used in portable music players, such as Apple Inc.'s iPod.
"More promising signs from NAND flash memory suppliers could be the underlying factor behind Novellus' more optimistic outlook, and these spending trends could emerge sooner than we even anticipated," wrote Stifel Nicholas analyst Patrick Ho, who reiterated his sell rating on Novellus based on market share and valuation concerns.
On Tuesday, semiconductor researcher iSuppli upgraded its near-term rating for DRAM suppliers to neutral, from negative.
It cited signs of increasing market momentum and an end to the severe price erosion that has hammered DRAM makers. DRAM chip prices have plummeted about 70% this year.
Chip-tool providers overall are facing a lull in demand, mostly due to the memory-chip market, with industry-wide sales forecasted to cool this year as electronics makers digest new equipment and weigh new orders.
Researcher Gartner Inc. predicts revenue will rise 2.7% to $43.1 billion after surging 23% in 2006