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Jan. 28, 2022, 8:20 a.m. EST

KLA Corp. stock drops following weak outlook

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By Wallace Witkowski

KLA Corp. shares fell in the extended session Thursday after the chip-equipment maker’s weak outlook overshadowed its earnings beat for the quarter.

KLA  /zigman2/quotes/209248041/composite KLAC +6.34% shares dropped 3% after hours, following a 4.9% decline in the regular session to close at $361.80.

KLA forecast earnings of $4.35 to $5.25 a share on revenue of $2.1 billion to $2.3 billion in the fiscal third quarter. Analysts surveyed by FactSet had estimated $5.50 a share on revenue of $2.37 billion for the fiscal third quarter.

The company reported fiscal second-quarter net income of $717.4 million, or $4.71 a share, compared with $457.3 million, or $2.94 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $5.59 a share, compared with $3.24 a share in the year-ago period.

Read: Chips may be sold out for 2022 thanks to shortage, but investors are worried about the end of the party

Revenue rose to $2.35 billion from $1.65 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast $5.45 a share on revenue of $2.33 billion, based on KLA’s forecast of $4.95 to $5.85 a share on revenue of $2.23 billion to $2.43 billion.

Read: Chip sector flirting with bear-market territory as semiconductor earnings kick off

So far, weak outlooks for the March-ending quarter risk becoming a drumbeat for the chip sector at large given this week’s earnings reports.

On Wednesday, larger rival Lam Research Corp. /zigman2/quotes/208077897/composite LRCX +6.18% fell short of expected revenue for the quarter and issued a weaker-than-expected forecast owing to supply-chain problems, and its shares dropped 6.9% in Thursday trading.

Read: The pandemic PC boom gave personal computers their biggest year in nearly a decade

On top of a weaker-than-expected forecast from Intel Corp. /zigman2/quotes/203649727/composite INTC +3.06% late Wednesday and Wall Street concerns about PC sales falling off , the whole chip sector was taking a hit with the PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX +5.01% down 4.8% on the day, compared with a 0.5% decline by the S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.02% . Intel shares fell 7% on the day.

/zigman2/quotes/209248041/composite
US : U.S.: Nasdaq
$ 351.51
+20.97 +6.34%
Volume: 1.66M
May 17, 2022 4:00p
P/E Ratio
17.06
Dividend Yield
1.19%
Market Cap
$49.33 billion
Rev. per Employee
$764,943
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/zigman2/quotes/208077897/composite
US : U.S.: Nasdaq
$ 512.27
+29.80 +6.18%
Volume: 1.64M
May 17, 2022 4:00p
P/E Ratio
16.02
Dividend Yield
1.17%
Market Cap
$66.93 billion
Rev. per Employee
$1.18M
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/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 44.40
+1.32 +3.06%
Volume: 28.60M
May 17, 2022 4:00p
P/E Ratio
7.38
Dividend Yield
3.29%
Market Cap
$176.15 billion
Rev. per Employee
$641,652
loading...
/zigman2/quotes/210598361/realtime
US : Nasdaq
3,066.50
+146.44 +5.01%
Volume: 345,106
May 17, 2022 5:16p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,088.85
+80.84 +2.02%
Volume: 2.46B
May 17, 2022 4:54p
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