Novellus Systems Inc. (NVLS) swung to a first-quarter net loss as the semiconductor-equipment maker reported $21.4 million in charges, related primarily to a tax change, and slumping revenue and margins.

Semiconductor manufacturers have seen few signs of rising demand for computers, phones and electronic devices that use chips. Novellus said last month it saw weakness spread across all regions, and Chief Executive Richard Hill said the memory market had "virtually stopped investing."

On Wednesday, Novellus reported a net loss of $66.4 million, or 69 cents a share, compared with year-earlier net income of $15.5 million, or 15 cents a share. The latest results include a $19.4 million charge as a result of a tax change law in California, where the company is based. It also recorded $2 million in charges to align its business with the economic downturn.

Excluding items, the quarter's loss would have been 47 cents a share, compared with year-earlier earnings of 16 cents.

Revenue slumped 69% to $98.9 million.

Last month, the company said it expected results to come in at the low end of its February outlook, which called for a per-share loss of 45 cents to 60 cents on revenue of $95 million to $110 million.

Gross margin slumped to 26% from 46.1%.

Bookings dropped 5.9% to $77.8 million from the fourth quarter, while shipments slumped 48% from the fourth quarter to $92.1 million. Backlog adjustments were $10.6 million, compared with $44.9 million in the fourth quarter.

Hill said the economic environment continues to be challenging, but said the company was "cautiously optimistic that our customers' order activity levels have stabilized and are beginning to rebound, although still at relatively low levels compared to our expectations."

Chip tool makers such as Novellus rely on the capital spending budgets of chip manufacturers. They have suffered throughout the downturn as most chip makers have cut production due to weakening demand.

The company also announced on Wednesday in a filing with the Securities and Exchange Commission that it planned to terminate its $150 million credit pact. The five-year pact was originally entered in January 2007, and the company said it didn't incur any early transaction penalties.

Shares fell 0.1%, or a penny, to $17.25 in after-hours trading, after closing up 3.7% in the regular session. The company's stock has rebounded recently from a 52-week low of $10.26 in November.

   -By John Kell, Dow Jones Newswires, 201-938-5285, john.kell@dowjones.com