Amid a resurgent technology sector, Varian Semiconductor Equipment Associates has posted its best quarter of earnings since the economy plunged into recession in 2008, and is now hiring factory workers in an otherwise stagnant jobs market.
Demand for smart phones and new forms of personal computing spurred a faster-than-expected rebound for the company, which makes the tools that form the building blocks of electronic gadgets, Varian executives said yesterday.
Varian reported this week it made $141.3 million in revenue during the three months ending Jan. 1, the third straight quarterly increase and the first time the company beat its results from the same period the year before since late in 2007.
"It has almost been surprising how fast it has picked up," Varian Chief Financial Officer Bob Halliday said yesterday. "We sold double the number of tools from (last) March to December."
The company reported $16.6 million in profits for the quarter, the second consecutive three-month period it finished in the black after three straight quarterly losses.
Spurred by the upturn, Varian, Gloucester's largest private-sector employer, has been re-hiring workers laid off in the recession.
As of last month, Varian had brought in 144 new workers since last March, bringing total employment at the Blackburn Industrial Park company to 1,418.
Halliday said many of the new hires were local manufacturing workers who had been laid off during the downturn. The company will likely add another 100 jobs in the next three months, he said.
Varian's bottom line has tracked closely with the larger economy and suffered like the rest of the technology sector during the credit crunch that followed the 2008 collapse of the housing bubble.
At the low point of the recession early last year, Varian had laid off more than 700 workers from its high employment mark of around 2,000 in 2007.
"We had a macro-economic meltdown; business collapsed," Halliday said. "We were very aggressive in our spending reductions and built a very small number of tools last March. Our customers didn't know where things were going."
From record-high quarterly revenues of $298.7 million in mid-2007 and profits of more than $43 million, Varian's earnings plunged to a low of $63.8 million with net loss $19.6 million in the first three months of 2009.
The gains at Varian come as Gloucester and the rest of Massachusetts search for reasons for optimism after being battered by job losses, especially in the industrial base and manufacturing.
On Tuesday, the state reported unemployment in Massachusetts had risen to 9.1 percent in December from 8.3 percent in November.
Other local employers, such as Blackburn Industrial Park neighbor Gloucester Engineering, have continued to struggle and lay off workers in an effort to pull themselves out of the economic slide.
In the country's last slowdown, Varian was able to weather the loss of new orders better than competitors and gained market share when trade picked up.
Even during the recession, Varian kept its research and development program alive and, in the long run, Halliday said he believes the company will increase its presence in new product markets, such as computer chips used in solar power cells.
"We believe we will gain market share," Halliday said. "We are also confident our development efforts in solar cells and other areas are going to pay off. We feel pretty good about our positioning."
Varian is projecting another increase in revenues, to between $186 million and $196 million, for the second quarter of 2010.
Patrick Anderson can be reached at 978-283-7000, ext. 3455, or via e-mail at panderson@gloucestertimes.com.
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