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Technology Stocks : KLA-Tencor Corporation (KLAC) -- Ignore unavailable to you. Want to Upgrade?

To: Johnnie W. who wrote (1083)	4/1/1998 4:30:00 PM
From: Narotham Reddy	Respond to of 1779

KLAC up 6% despite warning Dow Jones Newswires -- April 1, 1998 KLA-Tencor Up 6% Despite 3Q Profit Warning Dow Jones Newswires NEW YORK -- KLA-Tencor Corp. (KLAC) shares rose 6% Wednesday despite a warning from the company that third-quarter results would come in below expectations. The San Jose, Calif., company said third-quarter revenues would come in at about $270 million, compared with second-quarter revenues of $326 million. KLA-Tencor said analysts had expected third-quarter revenues of $300 million. Analysts said the stock rose Wednesday because the investment community believes KLA-Tencor is poised for a runup at the end of the current cyclical downturn. KLA-Tencor makes yield-monitoring and process control systems for the semiconductor manufacturing industry. "A lot of this bad news is in the stock right now," said Susan Billat of BancAmerica Robertson Stephens & Co. "Investors are looking for companies that are going to come out of the downturn stronger than ever." "Obviously KLA is having some difficulties, but there is forgiveness in the near term," she said. "They are the market leader by a lot in process control and yield management," Billat said, noting the company benefits from its "separation from second-tier companies." Billat explained current trends in the industry favor larger companies like KLA-Tencor that provide global technical support, assistance with plant integration, and who have the financial wherewithal to continue to invest in research and development. "The trends are working in favor of larger, well diversified companies," she said. "When we get to the end of the current downturn, (the bigger companies) should come out strong." "Conventional wisdom holds that the worse it gets now the better it will be later," said Gus Richard of Hambrecht & Quist Inc., who on March 19, raised his rating on the company to buy from hold but lowered his earnings estimates. KLA-Tencor "is not the first company to cut numbers and go up," he said. "People aren't getting punished for preannouncing - in a sense they are getting rewarded." He added KLA-Tencor is among the premier companies in the industry, and said he sees earnings improvements going forward. "There's little probability these guys are going to miss going forward," Richard said, noting semiconductor consumption historically increases every year. A company official wouldn't comment on stock activity. BancAmerica Robertson Stephens' Billat said a handful of other companies were in the same trough as KLA-Tencor, including Applied Materials Inc. (AMAT), Teradyne Inc. (TER), and, to a lesser degree, Novellus Systems Inc. (NVLS), all of whom saw their stock prices rise Wednesday. KLA-Tencor's Nasdaq-listed shares were recently up 2 3/8, or 6.2%, at 40 5/8 on volume of 5.3 million, compared with average daily volume of 2.7 million.