KLA-Tencor CEO backs view for lower Q1 results
SAN FRANCISCO, Sept 24 (Reuters) - The chief executive of chip equipment maker KLA-Tencor Corp. (NasdaqNM:KLAC - News) on Tuesday stood by financial guidance calling for a sharp drop in fiscal first quarter profit and revenue.
He added that business conditions were difficult for the maker of testing tools for semiconductor manufacturing.
"Things are very difficult out there and we're in the last couple weeks of our quarter, and right now we get most of our orders in the last few weeks," KLA-Tencor CEO Ken Schroeder said at the Banc of America investment conference in San Francisco. "It's just not good this quarter, customers are kind of holding back."
Schroeder reaffirmed guidance KLA-Tencor backed on Sept. 3 at a conference in Boston. The company expects fiscal first-quarter earnings per share of 25 cents to 26 cents, which include a one-time gain of 3 cents, on revenue of $370 million to $380 million.
Analysts expect first-quarter earnings per share excluding an item of 23 cents, on revenue of $375.6 million, according to tracking firm Thomson First Call.
In the year-ago first quarter, San Jose, California-based KLA-Tencor reported net income of $86.5 million, or 46 cents a share, on revenue of $502.8 million.
On Monday, Credit Suisse First Boston cut its investment outlook for 14 chip equipment makers, including KLA-Tencor, citing dampened capital spending.
Shares of KLA-Tencor rose $1.15, or 4.4 percent, to $27.78 in afternoon trading on the Nasdaq.
Schroeder said his company was not seeing any "significant cancellations" from customers, adding that chipmakers wanting to move to next-generation technologies and needing to stay competitive will need to invest in the latest chip-making gear.
Chipmakers are moving to smaller line widths on semiconductors and larger silicon wafers, a combination that boosts performance and helps to cut production costs.
"We believe all these investments will have to be made," Schroeder said. "We know things are tough, but if they want to stay in business they're going to have to invest."
Schroeder comments echo those from Jim Morgan, chairman and chief executive of Applied Materials Inc. (NasdaqNM:AMAT - News), the biggest maker of chip-making equipment. Morgan has said that too few chip companies are making the investments necessary to remain competitive in the rough and tumble, cyclical chip industry. |
