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Earnings Results: KLA Corp. earnings beat Street; shares slip following outlook

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KLA Corp. shares slipped in the extended session Thursday after the low end of the company’s earnings outlook range fell short of Wall Street’s average estimate even as results for the quarter topped those estimates.

KLA
KLAC,
+0.47%

shares declined 1% after hours, following a 0.5% rise in the regular session to close at $326.36.

The company, which makes the instruments that foundries use to fabricate the silicon wafers used to make chips, reported fiscal third-quarter net income of $567.5 million, or $3.66 a share, compared with $78.5 million, or 50 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $3.85 a share, compared with $2.47 a share in the year-ago period.

Revenue rose to $1.8 billion from $1.42 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast $3.61 a share on revenue of $1.75 billion, based on KLA’s forecast of $3.23 to $3.91 a share on revenue of $1.67 billion to $1.82 billion.

“We have seen a sharp increase in business levels in each of our major end markets, driven by secular demand trends across a broad range of semiconductor markets and application,” said Rick Wallace, KLA’s chief executive, in a statement.

KLA forecast fourth-quarter earnings of $3.47 to $4.35 a share on revenue of $1.76 billion to $1.96 billion, while analysts had estimated $3.66 a share on revenue of $1.78 billion.

Read: The semiconductor shortage is here to stay, but it will affect chip companies differently

Back in April, Lam Research Corp.
LRCX,
+0.46%

reported record results with quarterly profit topping $1 billion for the first time.

Chip-equipment makers like KLA and Lam are poised for multiple quarters of strength going forward as fabs, or the manufacturing plants that make the silicon wafers used in semiconductors, build out their capacity amid a global shortage in microchips.

Over the past 12 months, KLA shares have gained 86%, while the PHLX Semiconductor Index
SOX,
+0.76%

rose 78% over that period. Similarly, the S&P 500 index
SPX,
+0.68%

rose 43%, and the tech-heavy Nasdaq Composite Index
COMP,
+0.22%

gained 58%.

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