Nova Measuring Instruments Ltd. (Nasdaq:NVMI; TASE:NVMI) reported its first sequential drop in revenue after 11 consecutive quarters of growth, as the deteriorating global economic took its toll on the metrology solutions provider for the semiconductor industry.
Although Nova's revenue rose 7% to $25.8 million from $24.2 million for the corresponding quarter, it was 13% less than the $29.6 million for the preceding quarter.
Net profit fell to $5.9 million ($0.22 per share) for the third quarter from $7.3 million for the corresponding quarter and $9.2 million for the preceding quarter.
Cash flow from operations was $5.9 million for the third quarter, and Nova had $83.7 million in cash reserves at the end of September.
The third quarter results were within Nova's guidance, but its fourth quarter guidance reflects the drop in business, Nova expects $16-19 million revenue for the fourth quarter, 36-46% less than the record revenue posted for the second quarter. It expects a net profit of $23-25 million on $100-103 million revenue for the year as a whole.
Nova CFO Dror David told "Globes", "The drop is sales will likely cut the gross operating margin to 50%, but we do not anticipate any problem with collections, and there has been no change in customer credit days, which remains at around 50 days."
Nova president and CEO Gabi Seligsohn told "Globes", "Nova operates in a volatile industry, and we take a long-term perspective. In the past two years, we increased our income 2.5-fold, which is an impressive figure by any measure. We've entered a downturn in the business cycle, which we doubt will last a long time, and we have plans to again double our sales to $200 million a year, subject to the industry's condition.
"The capital market responds to short-term events, but in a multiyear perspective, the company generates cash and profits, and enters the present slowdown with unusual financial soundness."
Nova's share price fell 10% at the opening on Nasdaq to $6.55, giving a market cap of $170 million, after falling 14.7% by mid-afternoon on the TASE to NIS 23.15.
Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2011
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