NEW YORK (AP) — Shares of chip makers and companies that make equipment to produce them got a boost from bellwether Intel Corp.'s fourth-quarter results and outlook on Friday, after the company said it will boost its spending on capital expenditures this year.
Late Thursday, Intel posted a 48 percent increase in its fourth-quarter earnings. The results surpassed Wall Street's expectations thanks to strong corporate spending as companies sought to replace their servers and employees' old computers. Intel's first-quarter revenue outlook also surpassed estimates.
Shares of several chip-equipment companies — such as Applied Materials Inc., KLA-Tencor Corp., Novellus Systems Inc. and Varian Semiconductor Equipment Associates Inc. — hit 52-week highs on Friday. That's because Intel said it will raise its capital spending to $9 billion in 2011, a 73 percent jump from 2010 levels, said Standard & Poor's Equity analyst Angelo Zino. As a result, Zino raised his fundamental view on the semiconductor equipment sector to "positive" from "neutral."
"Given the news, we up our '11 industry growth outlook to 14 (percent) from 3 percent," the analyst wrote. "We also see the potential for upward earnings revisions for many of the semiconductor equipment providers."
Shares of Applied Materials rose 70 cents, or 4.9 percent, to a 52-week high of $14.94. Shares of Novellus jumped $3.14, or 9.5 percent, to a 52-week high of $35.95. KLA Tencor's shares climbed $2.45, or 6 percent, to $42.20, a hitting year-high of $42.75 earlier. Varian added $2.73, or 6.5 percent, to $44.30, earlier hitting a year-high of $44.48.
Shares of Altera Corp, which makes programmable chips used in a broad range of electronics, rose $1.46, or 4 percent, to $38.42. Intel's shares fell 24 cents to $21.06.