Semiconductor equipment vendor KLA beat estimates for its fiscal third quarter and guided higher than views for the current quarter. KLAC stock rose Friday on the news.
The Milpitas, Calif.-based company late Thursday said it earned an adjusted $5.26 a share on sales of $2.36 billion in the quarter ended March 31. Analysts polled by FactSet had expected earnings of $4.97 a share on sales of $2.31 billion. However, on a year-over-year basis, KLA earnings declined 4% while sales fell 3%.
For the current quarter, KLA forecast adjusted earnings of $6.07 a share on sales of $2.5 billion. Analysts had been looking for earnings of $5.73 a share on sales of $2.43 billion in the fiscal fourth quarter. In the June quarter last year, KLA earned an adjusted $5.40 a share on sales of $2.36 billion.
"Market conditions have stabilized and we expect our business levels to improve as we progress through the year," Chief Executive Rick Wallace said in a news release.
He added, "We are encouraged by the improvement in our customers' businesses across multiple end markets and this improvement is translating into constructive discussions with our customers about future opportunities for leading-edge capacity investments."
KLAC Stock Is In A Flat Base
On the stock market today, KLAC stock climbed 5% to close at 706.26.
KLAC stock is in a flat base with a buy point of 729.15, according to IBD MarketSurge charts.
At least six Wall Street analysts raised their price targets on KLAC stock after its earnings report. But only three of those analysts rate KLAC stock as a buy.
JPMorgan analyst Harlan Sur reiterated his overweight, or buy, rating on KLAC stock and raised his price target to 800 from 725.
"The (KLA) team remains confident that (the) March quarter is the bottom of this current cycle and expects continued quarter-over-quarter growth through the remainder of this year and into a stronger calendar 2025," Sur said in a client note.
ACM Research Sales Disappoint
Elsewhere among semiconductor equipment stocks, ACM Research stock fell Friday after the company announced preliminary revenue for the first quarter.
ACM guided to sales of $150 million to $152 million for the March quarter. Analysts had been modeling $152.4 million in revenue. ACM will report its full financial results for Q1 on May 8.
ACM makes wafer processing solutions for semiconductor and advanced wafer-level packaging applications.
On Friday, ACM stock dropped 4.4% to close at 27.04.
KLAC Stock Ranks Eighth In Group
Semiconductor equipment stocks have been a mixed bag this earnings season. ASML stock dropped below its 50-day moving average line after its Q1 report on April 17.
Lam Research and Teradyne both rose after they each delivered beat-and-raise earnings reports late Wednesday. Both companies called out the artificial intelligence megatrend as a growth driver.
KLAC stock ranks eighth out of 26 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. KLA has an IBD Composite Rating of 87 out of 99.
ACM Research ranks first in the semiconductor equipment group. Meanwhile, Lam Research ranks ninth and Teradyne is No. 12 in the group.
Further, ACM, ASML and KLA are on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
