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KLA-Tencor (KLAC) to Post Q4 Earnings: What's in the Cards?

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KLA-Tencor Corporation (KLAC - Free Report) is set to report fourth-quarter fiscal 2019 results on Aug 5.

The company topped the Zacks Consensus Estimate in the trailing four quarters, with average of 9.23%.

KLA-Tencor delivered a positive earnings surprise of 10.43% in the last reported quarter. Fiscal third-quarter earnings of $1.80 per share surged 325% year over year.

Strong Product Portfolio — Key Catalyst

KLA-Tencor’s robust product portfolio has been catering to the increasing demand for wafer products, which is a positive for the to-be-reported quarter. The company is expected to witness improved end-market results, especially in China.

The addition of new capacity by wafer manufacturers bodes well for the quarter to be reported, given increasing demand for its new wafer products. KLA-Tencor’s efforts in bringing EUV lithography technology to the market via collaborating with every EUV customer are expected to aid the company in the fiscal fourth quarter.

 

KLA-Tencor Corporation Price and EPS Surprise

 

Forecasts

For the fiscal fourth quarter, the company expects revenues in the range of $1.21-$1.29 billion. Non-GAAP earnings are expected in the range of $1.55-$1.85 per share.

KLA-Tencor expects shipments within $1.235-$1.315 billion. Memory is expected to be approximately 47% of shipments in the fiscal fourth quarter. Foundry and Logic are expected to constitute around 41% and 12% of its total shipments, respectively, in the quarter.

Reduction in memory capacity investment due to weakness in mobile demand and a lull in data center might impact shipments. Additionally, weakness in China could be an overhang for the to-be-reported quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: KLA-Tencor has an Earnings ESP of 0.00%.

Zacks Rank: It currently carries a Zacks Rank #3.

This combination makes surprise prediction difficult this earnings season.

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

SeaWorld Entertainment (SEAS - Free Report) has an Earnings ESP of +11.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cisco Systems Inc. (CSCO - Free Report) has an Earnings ESP of +1.53% and a Zacks Rank #2.

Ciena (CIEN - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2.

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