KLA (KLAC) to Report Q3 Earnings: What's in the Offing?

Zacks Equity Research
·4-min read

KLA Corporation KLAC is scheduled to report third-quarter fiscal 2021 results on Apr 29.

For the fiscal third quarter, the company expects revenues between $1.665 billion and $1.815 billion. The Zacks Consensus Estimate for net sales is pegged at $1.74 billion, indicating growth of 22.2% from the prior-year quarter’s reported figure.

Further, the company expects earnings of $3.23-$3.91 per share. The Zacks Consensus Estimate for the same stands at $3.59 per share, which suggests an improvement of 45.3% from the year-ago reported figure.

The company surpassed the Zacks Consensus Estimate in all the trailing four quarters,delivering an earnings surprise of 8.34%, on average.

KLA Corporation Price and EPS Surprise

KLA Corporation Price and EPS Surprise
KLA Corporation Price and EPS Surprise

KLA Corporation price-eps-surprise | KLA Corporation Quote

Factors to Consider

Solid demand for wafer products and product portfolio strength are likely to have contributed well to KLA’s fiscal third-quarter performance.

Additionally, the growing work-from-home trend and the booming gaming market, which are accelerating the demand for semiconductor devices, are expected to have been tailwinds.

Further, strong exposure to 5G infrastructure and the smartphone market is expected to have aided the performance of the company’s Electronics, Packaging and Components group.

Furthermore, growing Foundry and Logic investments are anticipated to have been major positives. Next-generation technology development, capacity additions at leading-edge nodes, increasing competitive dynamics and investment in EUV infrastructure are likely to have continued to drive momentum across Foundry and logic in the quarter under review.

Moreover, the company’s efforts in bringing the EUV lithography technology to the market have been gaining momentum.

These efforts along with the expanding value of inspection and measurement in addressing critical customer problems and prospects in Foundry and Logic are expected to have driven growth in the company’s Semiconductor Process Control revenues in the to-be-reported quarter.

Additionally, KLA’s strength in RF, MEMS and advanced packaging is anticipated to have continued accelerating its Specialty Semiconductor Process’s revenue generation.

Also, growing momentum across the company’s Gen5 optical inspection platform is likely to have contributed well. Increased deployment of Gen5 for both technology development and production monitoring at the advanced nodes by customers is expected to have contributed well to top-line growth in the quarter under review.

However, uncertainties related to the ongoing coronavirus pandemic are expected to get reflected in the company’s fiscal third-quarter results.

Further, sluggishness across PCB, Display and component inspection is likely to have remained an overhang for the company in the quarter to be reported.

What Our Model Says

Our proven model does not conclusively predict 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 -0.52% and a Zacks Rank #2.

Stocks to Consider

Here are somestocks you may consider, as our proven model shows that thesehave the right combination of elements to post an earnings beat this quarter.

Waters Corporation WAT has an Earnings ESP of +2.94% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMETEK, Inc. AME currently has an Earnings ESP of +0.49% and a Zacks Rank #3.

Square, Inc. SQ currently has an Earnings ESP of +23.72% and a Zacks Rank of 3.

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