Earnings Preview: KLA-Tencor

Apr.22.09 | About: KLA-Tencor Corporation (KLAC)

KLA-Tencor Corp. (NASDAQ:KLAC) is expected to report Q3 earnings after the market close on Thursday, April 23, with a conference call scheduled for 5:00 pm ET.


The consensus estimate is (26c) EPS and $299.85M for revenue, according to First Call. Guidance was lowered on the last earnings call with Q3 EPS of (35c) to (20c) on revenue of $280M to $320M. On March 30 the company said it would cut 10% of its global workforce, and reduce quarterly operating expenses by $140M to $145M. KLA-Tencor also said it would implement other cost-cutting actions. KLA said it would take charges of between $20M and $30M related to the restructuring.

Analyst Views

Stifel remains comfortable with their Q3 estimates of $293.5M and a proforma EPS loss of (19c). Stifel believes the company managed to deliver shipments late in the quarter to meet guidance, although they suspect that orders likely came in flat to modestly higher. Stifel will closely monitor management's commentary regarding the capex environment, which they suspect will still be cautious, reflective of the depressed market. On a company-specific basis, the firm believes the key topic remains the company's market share position in its core inspection business. Stifel's checks indicate that KLA-Tencor is seeing increased competitive pressures primarily from the likes of Applied Materials (NASDAQ:AMAT). For Q4 Stifel estimates revenue of $298.5M and proforma EPS of a loss (13c), excluding options. Stifel would not be surprised to see management guide June orders to be up 10%-20% sequentially. Stifel rated KLA-Tencor a Buy, with a $32 price target.