Investopedia: Fight The Tide On Novellus?

Semiconductor equipment maker Novellus (Nasdaq:NVLS) reported a sequential drop in sales, a drop in earnings and lower orders. Chip stocks left and right are preannouncing difficult quarters, as inventories rise and order times shrink. Competitors like Applied Materials (Nasdaq:AMAT) have more than enough resources to hunker down and compete aggressively. 

So it probably sounds insane to think about buying Novellus shares. And yet, maybe that is how investors should be thinking these days.

A Tough Second Quarter
Novellus announced that revenue in fiscal second quarter fell 15% on a sequential basis, though it climbed 9% from the year-ago level. Margins were a mixed bag, as gross margin was basically flat on a sequential basis, but operating margin fell by nearly four points. Operating income fell 27% from the first quarter (due in part to the company increasing R&D spending), but did increase 11% from the year ago level.



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