UPDATE 2-KLA-Tencor quarterly outlook misses Street expectations
SAN FRANCISCO, Oct 24 (Reuters) - Chip equipment maker KLA-Tencor Corp forecast earnings and revenue for the current quarter that were weaker than expected by Wall Street as contract manufacturers and memory chipmakers investing in new technology only partly offset a slow PC industry.
The company, whose products are used by chipmakers to measure the effectiveness of complicated manufacturing processes and reduce defects, said it expects an improvement in orders, but its stock fell in extended trade after it gave its earnings and revenue outlook on a conference call with analysts on Thursday.
The company said it saw strong demand from contract manufacturers and memory chipmakers implementing new technology while orders from logic chip companies declined as a proportion of its overall business.
Contract manufacturer TSMC has been preparing new process technology although it recently warned of a fourth-quarter revenue slide as smartphone sales weaken.
Chipmaker Intel Corp, struggling with slower PC sales as consumers turn to tablets, last week trimmed its 2013 capital spending plan for the third time in six months.
KLA-Tencor expects revenue in a range of $670 million to $730 million, Chief Executive Rick Wallace told analysts. Analysts expected revenue of $760 million for the current quarter, which ends in December.
Executives on the call said some revenue recognition in the current quarter would be delayed until the March quarter as customers complete "formal acceptance" of newly released products.
The company estimated orders of $800 million to $950 million in the current quarter, up from $790 million in the September quarter and higher than some analysts had predicted. RBC analyst Mahesh Sanganeria had expected $820 million in orders for the current quarter.
"We expect the strong demand environment to continue as momentum for new technology development continues to strengthen across multiple customers," Wallace said.
Fiscal first-quarter revenue was $658 million compared with $721 million a year earlier. Analysts, on average, were expecting first-quarter revenue of $657 million, according to Thomson Reuters I/B/E/S.
KLA-Tencor reported net income of $111 million, or 66 cents a share, compared with $135 million, or 80 cents a share, in the year-ago quarter.
Non-GAAP earnings per share were 68 cents in the first quarter. Analysts had expected earnings per share of 66 cents for the first quarter.
Wallace said he expected current-quarter non-GAAP earnings of 67 cents to 87 cents a share. Analysts had expected 96 cents.
Shares of KLA-Tencor fell 3.5 percent in extended trade after closing up 1.08 percent at $63.73.