Interested In KLA-Tencor Corporation (NASDAQ:KLAC)? Here’s How It Performed Recently
After looking at KLA-Tencor Corporation’s (NASDAQ:KLAC) latest earnings announcement (31 March 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for KLA-Tencor
Was KLAC weak performance lately part of a long-term decline?
I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to examine many different companies in a uniform manner using the most relevant data points. For KLA-Tencor, its most recent bottom-line (trailing twelve month) is US$709.66M, which, in comparison to the prior year’s figure, has declined by -24.62%. Since these values may be relatively nearsighted, I’ve estimated an annualized five-year value for KLAC’s net income, which stands at US$661.78M This suggests that even though earnings growth was negative against last year, over the longer term, KLA-Tencor’s profits have been rising on average.
What’s the driver of this growth? Well, let’s take a look at whether it is solely because of an industry uplift, or if KLA-Tencor has experienced some company-specific growth. The climb in earnings seems to be supported by a strong top-line increase beating its growth rate of costs. Though this has caused a margin contraction, it has made KLA-Tencor more profitable. Looking at growth from a sector-level, the US semiconductor industry has been growing its average earnings by double-digit 27.48% over the past year, and 14.26% over the past half a decade. This means whatever uplift the industry is enjoying, KLA-Tencor has not been able to realize the gains unlike its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I suggest you continue to research KLA-Tencor to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for KLAC’s future growth? Take a look at our free research report of analyst consensus for KLAC’s outlook.
Financial Health: Is KLAC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
