Return on Equity 124.12% for KLA-Tencor in 2Q15
A Performance Overview of the Semiconductor Equipment Sector
High return on equity
In 2Q15, KLA-Tencor Corporation’s (KLAC) ROE (return on equity) was 124.12%, compared to 14.09% in the same period last year. The company’s ROA (return on assets) increased as well to 11.68% from 9.34% in the same period. Its gross margin for 2Q15 was 57.26%, compared to 55.52% in 2Q14, while its operating margin increased as well from 23.56% to 26.77% in the same period.
One of the major issues KLA-Tencor faces is the decline in its revenues over the past three years, but its operating margin is still expanding, which indicates efficiency.
LAM Research’s and Applied Materials’ gross margins decrease
In 2Q15, Lam Research Corporation’s (LRCX) ROE was 10.30%, compared to 18.98% in the same period last year. The company’s ROA decreased as well to 5.65% from 11.89% in the same period. Its gross margin for 2Q15 was 43.31%, compared to 44.61% in 2Q14, whereas its operating margin decreased substantially from 17.28% to 12.9% in the same period.
While Lam Research’s gross margin has declined by 1.3% in the last five years, its operating margin has declined by 10.8% in the same period. The company’s asset growth is 27.6%, compared to its revenue growth of 8.7% over the last five years, which indicates low efficiency.
In 2Q15, Applied Materials (AMAT) ROE was 16.12%, compared to 15.88% in the same period last year. The company’s ROA improved marginally YoY to 9.84% from 9.48% in the same period. Its gross margin for 2Q15 was 40.88%, compared to 43.8% in 2Q14, whereas its operating margin declined YoY to 15.5% from 17.26% in the same period.
One of the major concerns with respect to Applied Materials is its decline in revenues over the last three years.
You can invest in Applied Materials (AMAT) by investing in the Market Vectors Semiconductor ETF (SMH). Applied Materials accounts for 3.95% of SMH. It also makes up 0.5% of the Technology Select Sector SPDR (XLK).
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