U.S. Markets open in 3 hrs 30 mins

KLA-Tencor (KLAC) to Post Q2 Earnings: What's in the Cards?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

KLA-Tencor Corporation KLAC is set to report second-quarter fiscal 2020 results on Feb 4. It delivered a positive earnings surprise of 12.7% in the last reported quarter.

The company topped the Zacks Consensus Estimate in the trailing four quarters, with average of 9.5%.

Fiscal Q2 Forecasts

For the fiscal second quarter, the company expects revenues in the range of $1.435-$1.515 billion. The Zacks Consensus Estimate for revenues is currently pegged at $1.47 billion, indicating growth of 31.6% from the year-ago quarter.

Memory is expected to be 36% of system revenues in the fiscal second quarter. Foundry is expected to constitute 55% of total shipments and Logic is anticipated to account for 9% of semi-process control system revenues.

Non-GAAP earnings are expected in the range of $2.39-$2.69 per share. The Zacks Consensus Estimate for earnings is currently pegged at $2.54 per share, indicating a decline of 4.1% from the year-ago quarter.

KLA Corporation Price and EPS Surprise

 

KLA Corporation Price and EPS Surprise
KLA Corporation Price and EPS Surprise

KLA Corporation price-eps-surprise | KLA Corporation Quote

Performance in the Last Reported Quarter

KLA-Tencor had reported fiscal first-quarter 2019 non-GAAP earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.20.

Revenues of $1.41 billion outpaced the Zacks Consensus Estimate of $1.35 billion and improved 29.3% on a year-over-year basis.

Factors to Note

KLA-Tencor’s robust product portfolio has been catering to increasing demand for wafer products.

The company’s Gen5 optical inspection platform has been gaining momentum. Increased deployment of Gen5 for both technology development and production monitoring at the advanced nodes by customers is expected to have positively impacted its top-line growth in the quarter. Increasing demand for mask inspection should have helped it to contribute to the revenue upside in the to-be-reported quarter.

The company’s efforts in bringing the EUV lithography technology to the market have been gaining momentum. These efforts, along with the expanding value of inspection and measurement in addressing critical customer problems, and semiconductor industry expansion in China are expected to have driven KLA-Tencor’s performance in the to-be-reported quarter.

Foundry and logic performed well in the fiscal first quarter, a trend that most likely continued in the fiscal second quarter as well, driven by next-generation technology development, capacity additions at leading-edge nodes, increasing competitive dynamics and investment in EUV infrastructure.

However, weakness in the memory segment might reflect on the company’s sales figures. Management expects WFE to be down 10-15% in 2019.

Earnings Whispers

Our proven model predicts an earnings beat for KLA-Tencor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of +2.22%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, KLA-Tencor has a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are a few other stocks worth considering, as our model shows that these too have the right combination of elements to deliver an earnings beat in the upcoming releases.

Advanced Energy Industries, Inc. AEIS has an Earnings ESP of +10.80% and a Zacks Rank #1.

Microchip Technology Incorporated MCHP has an Earnings ESP of +1.33% and a Zacks Rank of 1.

Applied Optoelectronics, Inc AAOI has an Earnings ESP of +8.12% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Applied Optoelectronics, Inc. (AAOI) : Free Stock Analysis Report
 
Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report
 
Advanced Energy Industries, Inc. (AEIS) : Free Stock Analysis Report
 
KLA Corporation (KLAC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research