KLA – Tencor Corp Earnings: Revenues Fall, Bringing Down Profit

The Cheat Sheet

S&P 500 component KLA – Tencor Corporation posted a decrease in profit as revenue declined. KLA-Tencor is a company that designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nanoelectronics industries. Its primary offerings include wafer and integrated circuit defect monitoring.

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KLA – Tencor Earnings Cheat Sheet for the Second Quarter

Results: Net income for the semiconductor company fell to $110.8 million (66 cents per share) vs. $185.5 million ($1.09 per share) a year earlier. This is a decline of 40.3% from the year earlier quarter.

Revenue: Fell 16.2% to $642.5 million from the year earlier quarter.

Actual vs. Wall St. Expectations: KLAC reported adjusted net income of 72 cents per share. By that measure, the company beat the mean estimate of 66 cents per share. It beat the average revenue estimate of $628.8 million.

Quoting Management: “A resurgence in demand from foundry customers drove strong order growth in the second quarter and has given KLA-Tencor excellent momentum as we begin calendar 2012,” said Rick Wallace, KLA-Tencor’s president and CEO. “The increasing costs, complexity and competitive pressures our customers are facing at the leading edge are helping to drive higher adoption of process control and position KLA-Tencor to continue to deliver superior financial performance.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 24.5% from the year earlier, while the figure increased more than twofold in the fourth quarter of the last fiscal year, more than threefold in the third quarter of the last fiscal year and 751.1% in the second quarter of the last fiscal year.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the third quarter of the last fiscal year, which saw revenue rise 74.4%.

The company beat estimates last quarter after being in line with expectations in the first quarter with net income of $1.17 per share.

The company’s cost of sales fell 12.4% from a year earlier to $272.9 million. Last quarter, cost of sales was 42.5% or revenue versus 40.6% a year earlier.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 80 cents per share, down from 89 cents ninety days ago. At $3.55 per share, the average estimate for the fiscal year has fallen from $3.93 ninety days ago.

Competitors to Watch: Rudolph Technologies, Inc. , Nanometrics Incorporated , Nova Measuring Instruments Ltd. , Applied Materials, Inc. , Zygo Corporation , Camtek LTD. , CyberOptics Corporation , Lam Research Corporation , LTX-Credence Corporation , and Cohu, Inc. .

Stock Performance: Shares of KLAC were down 1.9% from the previous close.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)


To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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