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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (90085)	4/26/2023 7:26:40 PM
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MW KLA stock rises as weak outlook overlooked on forecast of second-half recovery 7:15 PM ET 4/26/23 \| MarketWatch By Wallace Witkowski KLA Corp.'s quarterly results topped Wall Street estimates late Wednesday, but its outlook didn't, and while that depressed shares at first, the stock swung to a gain after hours as the chip making-equipment supplier pointed to a growing stability in its end markets. KLA (KLAC) shares ticked up 2% after hours, following a 0.1% decline in the regular session to close at $357.36. While the PHLX Semiconductor Index rose 0.6%, the S&P 500 index declined 0.4% , and the tech-heavy Nasdaq Composite Index rose 0.5%. KLA forecast earnings of $4.23 to $5.43 a share on revenue of $2.13 billion to $2.38 billion in the fiscal fourth quarter. Analysts surveyed by FactSet had estimated $5.32 a share on revenue of $2.37 billion for the fiscal fourth quarter. In its letter to shareholders, Milpitas, Calif.-based KLA reiterated its forecast of a 20% decline in the wafer-fab equipment market to $75 billion in 2023 from 2022's $95 billion. "While the timing of a meaningful resumption in WFE investment growth remains unclear, we do see overall demand stabilizing around current business levels for our semiconductor process-control systems business, and we expect this demand profile to continue through the second half of the calendar year," the company said. When asked how the company could be so confident given that memory-chip fabs still have inventory, Bren Higgins, KLA's chief financial officer, told analysts on a conference call that memory had fallen to just 14% of the company's business. "You go back in our recent history, [the percent of revenue from memory fabs] hasn't been that low really ever," Higgins told analysts. "While the second half might be a little bit stronger than the first half, given how low the first half was, it's still pretty low overall in terms of our forecast and expectations." Higgins said that could grow to 23% in the second half of the year, and that "there's some wild cards around how customers ultimately spend." Rick Wallace, KLA's chief executive, added that when one looked at the company's business "more tied to capacity in memory, that's not really showing up." What's showing up are sales to foundry and logic fabs, he said. Plus, Wallace said, even customers that had low-capacity use still had to keep up with technological developments, requiring new equipment purchases, and that there was "some stability in that." KLA reported fiscal third-quarter net income of $697.8 million, or $5.03 a share, compared with $730.6 million, or $4.83 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $5.49 a share, compared with $5.13 a share in the year-ago period. Revenue rose to $2.43 billion from $2.29 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast adjusted earnings of $5.32 a share on revenue of $2.37 billion, based on KLA's forecast of $4.52 to $5.94 a share on revenue of $2.2 billion to $2.5 billion. Last week, rivals Lam Research Corp. (LRCX) and ASML Holding NV (ASML.AE) both forecast shaky enough outlooks to prompt analysts to figure a bottom was near term, as did Taiwan Semiconductor Manufacturing Co(2330.TW). -Wallace Witkowski This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.