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Kulicke & Soffa Industries, Inc. (KLIC - Snapshot Report) is seeing strong order demand heading into the summer and fall which should boost fiscal third quarter results.

Kulicke & Soffa manufactures semiconductor assembly equipment. Its products include ball banding, die bonding, wedge bonding, manual bonding systems and dicing blades.

Kulicke & Soffa Surprised for the 4th Straight Quarter

On May 5, Kulicke & Soffa reported fiscal 2010 second quarter results and just beat the Zacks Consensus by a penny. But a beat is a beat. It has averaged a surprise of 113% over the last 4 quarters.

Earnings per share were 31 cents compared to the Zacks Consensus of 30 cents. Revenue was up 510% to $153.8 million from the year ago quarter. The company clearly struggled in 2009, however, so comparisons don't tell the whole story. It reported a loss of 79 cents for the year.

The quarter was boosted by volume increases in ball bonders which jumped 21% over the previous quarter's levels.

"We are obviously pleased with the March quarter’s revenue, profitability, and cash flow. These results reflect the current, unprecedented demand for semiconductor assembly capacity, and for K&S’s wire bonders in particular," said Scott Kulicke, CEO.

"That demand is broad based, coming from both IDMs and subcontractors, and across all application spaces including logic, memory, linear and analog, discrete and LED. It also includes both gold and copper wire applications," he said.

"We are especially pleased with our success in LED as well as the initial demand we are seeing for our iStack die bonders as these markets are key to future incremental growth," he added.

Third Quarter Guidance

Kulicke & Soffa is bullish looking forward. Based on current orders, it is forecasting demand to continue at least into the fall which is allowing the company to commit to continuing to ramp up wire bonder production.

Kulicke & Soffa projects fiscal third quarter revenue of $205 million.

Zacks Consensus Estimates Jump

Given the company's optimistic revenue forecast and comments, the analysts moved to revise estimates higher.

The third quarter Zacks Consensus Estimate climbed 45% to 55 cents from 38 cents per share in the last month with 2 estimates rising and 1 being lowered in that time period.

Similarly, the fiscal 2010 Zacks Consensus rose 37% to $1.59 from $1.16 per share in the last month as 3 estimates moved higher.

Analysts are less positive on fiscal 2011. Earnings are expected to fall nearly 30% to just $1.12 per share.

Kulicke & Soffa is Cheap

There are value stocks and there are "cheap as heck" value stocks. Kulicke & Soffa qualifies in the "cheap as heck" category.

The company is trading at just 4.3x forward earnings and has a price-to-book ratio of 2.3. Both are well within the value parameters. Kulicke & Soffa also has a stellar 5-year average return on equity (ROE) of 33.3%.

Kulicke & Soffa is a Zacks #1 Rank (strong buy) stock.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor in charge of the market-beating Zacks Value Trader service.