CORRECTED - CORRECTED-UPDATE 2-Novellus sees strong Q1; Q4 tops Wall Street

(Corrects period in subhead)

* Sees Q1 EPS $0.35-$0.42 vs est. $0.34

* Sees Q1 rev $245 mln-$270 mln vs est. $250.7 mln

* Q4 EPS $0.39 vs est. $0.33

* Q4 rev $ 244.5 mln vs est. $237.1 mln (Recasts; Adds analyst comments, conference call details, background)

By Mansi Dutta

BANGALORE, Feb 3 (Reuters) - Novellus Systems, Inc (NVLS.O), which provides equipment for the semiconductor industry, posted better-than-expected quarterly results, and forecast first quarter profit above market view.

For the first quarter, the chip-gear maker expects to earn 35 cents to 42 cents per share, on revenue of $245 million and $270 million.

Analysts on average were looking for earnings of 34 cents per share, on revenue of $250.7 million, according to Thomson Reuters I/B/E/S. [ID:nWNAB2710]

The company expects semiconductor demand to continue, Chief Executive Richard Hill said on a conference call.

The demand is being fueled by a worldwide acceleration of IT infrastructure expansion, including the adoption of Windows 7, massive government spending worldwide to enhance security, and increase in Chinese consumer spending, he added.

"What people tried to dig in (on the call) was the forecast for the rest of the year, especially given that Lam Research (LRCX.O) a week ago commented that shipments would likely be down in the second half of the year, and Novellus sees rest of the year improving for them," Pacific Crest Securities analyst Weston Twigg said.

While Lam Research had forecast strong shipments for the March quarter versus modest shipments forecast by Novellus, Lam's projections for the second half of the year had worried investors. [ID:nSGE60R0KS]

"Novellus' commentary this week is more reassuring that we are still in sort of this steady upcycle; we may see a couple of quarters where things flatten up a bit but growth for the next year and half looks very good," Twigg said.

Q4 BEATS

The company posted fourth-quarter net income of $35.2 million, or 36 cents per share, compared with a loss of $130.3 million, or $1.36 per share, a year ago.

Excluding items, the company earned 39 cents a share. [ID:nWNAB2639]

Net sales for the company, which competes with larger rival Applied Materials Inc (AMAT.O), rose 30 percent to $244.2 million.

The company's shipments nearly doubled to $244.5 million sequentially.

Analysts expected earnings of 33 cents a share, excluding items, on revenue of $237.1 million, according to Thomson Reuters I/B/E/S.

Shares of the San Jose, California-based company, which closed at $22.05 Wednesday on Nasdaq, were about flat in trading after the bell. (Reporting by Mansi Dutta; Editing by Unnikrishnan Nair)