Santa Clara, California-based Applied Materials said net income fell to $47.5 million, or 13 cents a share on a diluted basis, for its fiscal third-quarter ended July 26, from $186.6 million, or 49 cents a share, a year earlier.

Applied Materials, which warned last month that its results would lag behind expectations, joins other chip-equipment makers that have been hurt by the Asian economic crisis, which has helped send the chip industry into a slump.

Slower-than-expected personal computer sales also have hurt results. Applied Materials gave little indication when sales might start to rebound.

``We are unable to predict how long this cycle will last,'' chairman and chief executive, James Morgan, said in a statement. ``Thesharp decline in new orders and net sales was broad-based.''

Excluding charges, Applied Materials said its earnings were $70.6 million, or 19 cents a share, vs $145.2 million, or 38 cents a share, a year ago. That beat Wall Street expectations of 16 cents a share, according to First Call Corp.

Revenues fell 16 per cent to $884 million from $1.06 billion a year earlier.

Customers across the globe responded to the chip slump by delaying equipment deliveries and cutting capital spending, Morgan said. As a result, orders in the third quarter plunged to $608 million from $1.24 billion in the year-ago period and from $1.03 billion in the second quarter.

When Applied warned last month that profits would fall below forecasts, what rattled investors and analysts most was the company's disclosure that orders had fallen far more than expected. Applied, as the largest of the equipment makers, is viewed as one of the bellwethers for the semiconductor industry, along with Intel Corp and others.

Applied also saidthat because it was uncertain when the current slump will end, it was assessing its ``infrastructure,'' a suggestion it may have to do more to cut its workforce.

In May, Applied said it had begun offering buy-out packages to cut its workforce amid flagging demand. It said then that it would take a charge in the third quarter.

The company took a pretax charge of $35 million, or 6 cents a diluted share after tax, for its May 26 buy-out plan.

The semiconductor industry is now forecast to contract at least 1.8 per cent this year, compared with earlier forecasts of 17 per cent growth, according to market research firm Dataquest.

Applied shares fell 81 cents to $32.875 in Nasdaq trading.The company reported results after the close of regular trading.