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KLA (KLAC) to Report Q4 Earnings: What's in the Cards?

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KLA Corporation (KLAC - Free Report) is scheduled to report fourth-quarter fiscal 2022 results on Jul 28.

For the fiscal fourth quarter, KLAC expects revenues between $2.30 billion and $2.55 billion. The Zacks Consensus Estimate for sales is pegged at $2.42 billion, indicating growth of 25.7% from the year-ago fiscal quarter’s reported value.

Management anticipates non-GAAP earnings per share in the range of $4.93-$6.03 for the fiscal fourth quarter. The consensus mark for earnings per share is pegged at $5.46, indicating a 23.3% rise from the previous-year fiscal quarter’s reported figure. The consensus mark has been unchanged over the past 30 days.

KLAC’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 6.63%.

KLA Corporation Price and EPS Surprise

KLA Corporation Price and EPS Surprise

KLA Corporation price-eps-surprise | KLA Corporation Quote

Key Factors to Note

Strong customer demand across KLA’s all major product groups is likely to have benefited its performance in the fiscal fourth quarter as well.  

Continuous efforts to expand KLA’s product portfolio and develop a comprehensive suite of products and technologies might have acted as key drivers in the to-be-reported quarter.

Growing digitization across multiple industries and related end markets, advancement in emerging technologies and increasing investment in legacy nodes are expected to have constantly driven demand for semiconductors in the underlined quarter.

Solid momentum in wafer fabrication equipment is likely to have continued aiding KLA’s performance in the quarter under review.

In foundry and logic, KLAC has been simultaneously investing in multiple nodes and rising capital intensity for sometime now. This might have continued supporting its performance in the fiscal fourth quarter.

KLA has been performing well in China, Taiwan and Korea for a while, a trend that most likely continued in the quarter under discussion.

Expanding installed base, increasing customer adoption of long-term service agreements, higher utilization rates and extension of service opportunities in the legacy nodes are expected to have continued driving services revenues in the June quarter.

In addition, KLA’s Electronics, Packaging and Components or the EPC group is likely to have performed well in the fiscal fourth quarter owing to strength in automotive, 5G and advanced packaging.

However, uncertainties related to the ongoing coronavirus pandemic might get reflected in the upcoming quarterly results. The pandemic-induced lockdown in China is expected to have remained a headwind.

Supply-chain challenges, increasing operating expenses, rising global logistics costs and labor cost inflation are expected to have hurt KLAC’s profitability in the quarter under review.

What Our Model Says

Our proven model predicts an earnings beat for KLA this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

KLA has an Earnings ESP of +0.15% and a Zacks Rank #3 at present.

Other Stocks to Consider

Here are some other stocks that you may also consider, as our model shows that these too have the right combination of elements to beat on earnings this season.

Aspen Technology (AZPN - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aspen Technology is set to report fourth-quarter fiscal 2022 results on Aug 8. The Zacks Consensus Estimate for ASPN’s earnings is pegged at $2.15 per share, which suggests an increase of 40.5% from the prior-year fiscal period’s reported figure.

Keysight Technologies (KEYS - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank of 2 at present.

Keysight Technologies is scheduled to release third-quarter fiscal 2022 results on Aug 17. The Zacks Consensus Estimate for KEYS’ earnings is pegged at $1.79 per share, suggesting an increase of 16.2% from the prior-year fiscal quarter’s reported figure.

Advanced Micro Devices (AMD - Free Report) has an Earnings ESP of +2.14% and a Zacks Rank of 3 at present.

Advanced Micro Devices is scheduled to release second-quarter 2022 results on Aug 2. The Zacks Consensus Estimate for AMD’s earnings is pegged at $1.03 per share, suggesting an increase of 63.5% from the prior-year quarter’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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