May 2--Varian Semiconductor Equipment Associates struggled to weather another dismal quarter in the once-brave new chip world of iconic names.

The maker of capital equipment for the development of computers, cameras, phones, games and the electronic like pared more jobs and watched as customers such as Intel and Samsung worked through excess capacity from the long-lost boom times. But company officials identified an uptick in spare parts sales, the first solid signs that the computer age's worst slump has an end.

Varian reported quarterly revenues of $63.8 million, compared to revenue of $255.3 million for the same period a year ago -- a decline of 75 percent. The report covers the quarter from Jan. 1 through March 31.

The company also reported a net loss of $19.6 million, compared to net positive income of $34.1 million in the same quarter a year ago.

On NASDAQ, the company's stock (VSEA) lost $1.69 yesterday for a price of $23.90 , but it had been rallying since November on the reputation for managing hard times made in past recessions.

"We continue to gain a bigger piece of our market, but it's a smaller market, and our stuff lasts a long time," said CFO Robert Halliday.

"While we're still a long way from where we were," said CEO Gary Dickerson in remarks prepared for a conference call to announce second-quarter results, "we are starting to see customers turning tools back on and some level of technology buying."

Halliday yesterday explained that the downturn for the global leader in chip-making capital equipment has been especially intense because of the enormous capital needs of customers who overpurchased during the boom and, with demand collapsing, also found a near global drought in capital.

"They overbuilt in 2007; there was easy access to capital," he noted.

The workforce of 1,393 in December was reduced to 1,274 this past quarter, a cut that also went with a three-week unpaid shutdown and no raises.

"Our employees are always happy to be employed at Varian," said Halliday. "Now management and employees are making sacrifices.

"We're very optimistic, we're trying to sustain as many employees as we can," he added.

Employment peaked at about 2,000 in the fall of 2007, just after the company shipped 100 tools for a record $300 million in sales.

But, in the first quarter of this year, he said Varian "built in single digits."

Halliday said company contributions to the 401k plan, which had been 150 percent of employee contribution, have been suspended.