Varian sees 3Q shortfall

June 11, 2001: 10:32 a.m. ET

Chip equipment maker says weak demand will weigh on top line

NEW YORK (CNNfn) - Blaming continued weakness in demand for semiconductors, Varian Semiconductor Equipment Associates Inc. warned Monday that its fiscal third-quarter revenue will fall far short of previous expectations.

The company, which makes capital equipment used to manufacture semiconductors, said it now expects revenue for the quarter ending June 30 to range between $125 million and $135 million.

Prior to the warning, the consensus estimate of three analysts polled by earnings tracker First Call was for revenue of $139 million, with one expecting sales of $144 million.

Varian did not provide an earnings per share estimate for the quarter. Analysts most recently had expected the company to turn a profit of 21 cents per share.

Executives of Varian in Gloucester, Mass., said some of customers have delayed deliveries and others have canceled orders. They also said others have placed orders for newer equipment that is used to manufacture 300 mm wafers.

The company, which already has reduced its total staff by approximately 20 percent since January, said it will take additional cost-cutting measures, including shutting down its plants for two weeks in July.

Shares of Varian (VSEA: down $2.78 to $39.69, Research, Estimates) fell more than 5 percent in Nasdaq trade after the warning, which was released right after the New York markets opened.