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KLA Corp. (KLAC) Beats Q1 Earnings and Revenue Estimates
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KLA Corporation (KLAC - Free Report) reported first-quarter fiscal 2022 earnings per share of $4.64, which beat the Zacks Consensus Estimate by 4.3%. The figure was up 53.1% year over year and 4.7% sequentially.
Revenues increased 35.4% from the year-ago quarter and 8.2% sequentially to $2.08 billion, surpassing the Zacks Consensus Estimate by 2.97%. The reported figure was at the higher end of the company’s guided range of $1.92-$2.12 billion.
Strong momentum in core markets and increased customer demand across each of the major product groups drove the quarterly results.
Growing investments across multiple nodes in Foundry and logic contributed well to its quarterly performance.
Management has a favorable outlook toward the wafer fab equipment industry. It expects positive industry dynamics to continue in the calendar year 2022 due to strong semiconductor demand.
Products revenues (accounting for 78% of total revenues) increased 42.3% year over year to $1.63 billion.
Services revenues (22% of total revenues) also increased 15.5% from the year-ago quarter to $453.9 million.
The growth in Services revenues is attributed to the expanding installed base, higher utilization rates and increasing expansion of service opportunities in the trailing edge.
In terms of reportable segments, Semiconductor Process Control revenues increased 40% year over year to $1.78 billion, driven by strength in foundry and logic. Foundry & Logic accounted for 61%, and Memory constituted about 39% of semiconductor process control systems’ revenues.
Further, the Electronics, Packaging and Components or EPC group reported strong results for the quarter, driven by its high exposure to 5G mobile and infrastructure as well as growing demand in automotive.
Specialty Semiconductor Process revenues were $102 million, up 15% year over year.
PCB, Display and Component Inspection revenues grew 12% from the year-ago quarter to $203 million.
Operating Details
Gross margin was 62.9% compared with 62.1% in the prior-year quarter. The figure was at the higher end of the guided range of 61.5-63.5%.
Non-GAAP operating expenses increased 15.2% year over year to $432.4 million. As a percentage of sales, research and development expenses contracted 185 basis points (bps) year over year. Also, as a percentage of sales, selling, general and administrative costs contracted 195 bps year over year.
Balance Sheet
As of Sep 30, 2021, cash, cash equivalents and marketable securities totaled $2.6 billion compared with $2.5 billion on Jun 30, 2021.
Cash from operations was $863.8 million for the fiscal first quarter versus $465.6 million in the prior quarter.
During the quarter, the company paid $162.8 million in dividends and repurchased $399.7 million shares.
Second-Quarter Fiscal 2022 Guidance
For second-quarter fiscal 2022, revenues are expected between $2.23 billion and $2.43 billion. The Zacks Consensus Estimate for revenues is pegged at $2.24 billion.
The company expects non-GAAP EPS within $4.95-$5.85. The Zacks Consensus Estimate for non-GAAP EPS is pegged at $5.17.
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KLA Corp. (KLAC) Beats Q1 Earnings and Revenue Estimates
KLA Corporation (KLAC - Free Report) reported first-quarter fiscal 2022 earnings per share of $4.64, which beat the Zacks Consensus Estimate by 4.3%. The figure was up 53.1% year over year and 4.7% sequentially.
Revenues increased 35.4% from the year-ago quarter and 8.2% sequentially to $2.08 billion, surpassing the Zacks Consensus Estimate by 2.97%. The reported figure was at the higher end of the company’s guided range of $1.92-$2.12 billion.
Strong momentum in core markets and increased customer demand across each of the major product groups drove the quarterly results.
Growing investments across multiple nodes in Foundry and logic contributed well to its quarterly performance.
Management has a favorable outlook toward the wafer fab equipment industry. It expects positive industry dynamics to continue in the calendar year 2022 due to strong semiconductor demand.
KLA Corporation Price, Consensus and EPS Surprise
KLA Corporation price-consensus-eps-surprise-chart | KLA Corporation Quote
Top-Line Details
Products revenues (accounting for 78% of total revenues) increased 42.3% year over year to $1.63 billion.
Services revenues (22% of total revenues) also increased 15.5% from the year-ago quarter to $453.9 million.
The growth in Services revenues is attributed to the expanding installed base, higher utilization rates and increasing expansion of service opportunities in the trailing edge.
In terms of reportable segments, Semiconductor Process Control revenues increased 40% year over year to $1.78 billion, driven by strength in foundry and logic. Foundry & Logic accounted for 61%, and Memory constituted about 39% of semiconductor process control systems’ revenues.
Further, the Electronics, Packaging and Components or EPC group reported strong results for the quarter, driven by its high exposure to 5G mobile and infrastructure as well as growing demand in automotive.
Specialty Semiconductor Process revenues were $102 million, up 15% year over year.
PCB, Display and Component Inspection revenues grew 12% from the year-ago quarter to $203 million.
Operating Details
Gross margin was 62.9% compared with 62.1% in the prior-year quarter. The figure was at the higher end of the guided range of 61.5-63.5%.
Non-GAAP operating expenses increased 15.2% year over year to $432.4 million. As a percentage of sales, research and development expenses contracted 185 basis points (bps) year over year. Also, as a percentage of sales, selling, general and administrative costs contracted 195 bps year over year.
Balance Sheet
As of Sep 30, 2021, cash, cash equivalents and marketable securities totaled $2.6 billion compared with $2.5 billion on Jun 30, 2021.
Cash from operations was $863.8 million for the fiscal first quarter versus $465.6 million in the prior quarter.
During the quarter, the company paid $162.8 million in dividends and repurchased $399.7 million shares.
Second-Quarter Fiscal 2022 Guidance
For second-quarter fiscal 2022, revenues are expected between $2.23 billion and $2.43 billion. The Zacks Consensus Estimate for revenues is pegged at $2.24 billion.
The company expects non-GAAP EPS within $4.95-$5.85. The Zacks Consensus Estimate for non-GAAP EPS is pegged at $5.17.
Zacks Rank & Stocks to Consider
Currently, KLA Corp. has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Trimble (TRMB - Free Report) , Semtech Corporation (SMTC - Free Report) and Apple (AAPL - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for Trimble, Semtech, and Apple are currently projected at 10%, 12.5%, and 12.5%, respectively.