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KLA-Tencor (KLAC) is expected to report Q3 earnings after the market close on Thursday, April 26, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is $1.10 for EPS and $801.96M for revenue, according to First Call. Analysts expect a decent Q3, with revenue and earnings coming in-line with management's guidance. KLA-Tencor is thought to be benefiting from the pickup in foundry capex spending in the near term. Additionally, the eventual shift to 3D device structures in the memory space will also benefit KLA over the next few years. Analysts also believe that spending on 28nm technology is benefiting KLA more than its peers. Most analysts expect orders to come in at the high end of the guidance range sequentially -- due to strength at foundries where KLA has 70%+ market share. For Q3, KLA expects orders to be down 13.2% to up 2.6%, revenue of between $770M and $830M, opex to be flat sequentially, other income/expense to be a net expense of $10M, a tax rate of 26% and a share count of 169M. All resulting in a non-GAAP EPS of between $1.00-$1.18. KLA saw Q3 new orders $825M-$975M. Management also said on their last earnings call that they expects to continue repurchasing shares, paying dividend in Q3.

Analyst Views

Stifel Nicolaus expects KLA to meet and likely exceed their estimates of $809.5M in revenue and pro-forma EPS of $1.14, excluding options -- $1.05 including. Stifel believes the company experienced strong shipments from the foundries and this could provide the upside to estimates when all is said and done. The firm believes KLA-Tencor will likely report slightly above the mid-point of bookings guidance, at approximately $900M or down 5% sequentially, and Stifel is expecting the company to guide to flattish bookings in June.

Source: Earnings Preview: KLA-Tencor