Bloomberg News

KLA-Tencor Falls on Forecast for Orders: San Francisco Mover

July 10, 2012

KLA-Tencor Corp. (KLAC:US), a maker of machinery used in the production of semiconductors, fell after the company said orders in the current quarter will decline as makers of memory chips hold off on boosting production.

KLA-Tencor shares declined (KLAC:US) less than 1 percent to $45.49 at the close in New York. The comments on orders from Chief Executive Officer Rick Wallace erased earlier gains in the stock, which had risen as much as 2.6 percent after he said sales in the quarter that ended in June came in at the high end of the company’s forecast range.

“We do think we’ll be sequentially down in September and everything we see says it gets better in December,” Wallace said at a company presentation in San Francisco today.

The Milpitas, California-based company, which makes tools that verify the proper completion of different stages in chip production, gave its forecasts after larger competitor Applied Materials Inc. (AMAT:US) earlier today cut its fiscal 2012 sales estimate, citing weak demand from foundries, companies that manufacture chips on a contract basis for other electronics makers.

KLA-Tencor, by contrast, is getting stronger orders from foundries, while makers of memory chips aren’t ordering as many machines, Wallace said.

The company had previously said sales in the recent period would be $840 million to $900 million. While the total market for chipmaking machinery will decline by 10 percent to 15 percent in 2012 from last year, KLA-Tencor expects its own annual sales to rise at a percentage “in the mid-single digits,” Wallace said.

KLA-Tencor shares have dropped 5.7 percent this year, compared with a decline of less than 1 percent for the Philadelphia Semiconductor Index. (SOX)

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • KLAC
    (KLA-Tencor Corp)
    • $71.69 USD
    • -1.33
    • -1.86%
  • AMAT
    (Applied Materials Inc)
    • $21.09 USD
    • -0.66
    • -3.14%
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