KLA-Tencor Shares Down 5% On Weak Outlook, Q2 Adj. Profit Tops View

(RTTNews) - Chip equipment maker KLA-Tencor Corp. (KLAC) reported Thursday a profit for the second quarter that plunged from last year, reflecting hefty loss on extinguishment of debt. Adjusted earnings per share and quarterly revenues topped analysts' expectations.

Shares of the company declined more than five in extended trades after the company, in a conference call, reportedly forecast earnings for the third quarter significantly below Street view.

"We are pleased with the Company's performance in the second quarter. Continued market leadership and good execution led to revenue growth and strong gross margins in the period," President and CEO Rick Wallace said in a statement.

The Milpitas, California-based company reported net income of $20.27 million or $0.12 per share for the second quarter, lower than $139.25 million or $0.83 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $112.83 million or $0.68 per share, compared to $143.07 million or $0.85 per share in the year-ago quarter.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined 2 percent to $676.35 million from $705.13 million in the same quarter last year and topped eighteen Wall Street analysts' consensus estimate of $664.27 million by a whisker.

Product revenues for the quarter decreased 7 percent to $504 million, while service revenues grew 7 percent to $162 million from last year.

Total costs and operating expenses increased to $521.64 million from $517.15 million last year. The company incurred a loss on extinguishment of debt and other of $131.67 million.

In a conference call, KLA-Tencor reportedly forecast earnings for the third quarter in a range of $0.63 to $0.87 per share, on projected revenues between $685 million to $762 million. Analysts expect the company to earn $0.98 per share on revenues of $790.49 million for the quarter.

KLAC closed Thursday's regular trading session at $70.95, up $1.54 or 2.22% on a volume of 2.27 million shares. However, the stock lost $3.84 or 5.41% in after-hours trading.