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KLA-Tencor Posts Bigger Than Expected 3Q Loss

The Associated Press

MILPITAS, Calif. (AP) — Chip manufacturing equipment maker KLA-Tencor Corp. posted a fiscal third-quarter loss of nearly $83 million, worse than Wall Street analysts expected, as sharply lower sales and restructuring and acquisition charges hurt results.

For the three months ended March 31, KLA-Tencor reported a loss of $82.8 million, or 49 cents per share. That compares with a profit of nearly $111 million, or 61 cents per share, in the year-ago quarter.

The latest quarter's results were hurt by a $19.3 million restructuring charge. On March 30, the company said it was laying off another 10 percent of its global work force, and planned to consolidate facilities. That announcement followed a November disclosure of plans to cut 900 jobs from what had been a 6,000-strong work force.

KLA-Tencor also recorded $16.7 million in acquisition-related charges in the latest quarter.

Not counting those charges and other one-time items, KLA-Tencor's loss was $58.3 million, or 34 cents per share.

On that basis, the loss was wider than the consensus forecast of analysts surveyed by Thomson Reuters, who expected a loss of 26 cents per share, on average.

Revenue dropped nearly 49 percent from $602.2 million in the year-ago quarter to $309.6 million. That result beat analysts' forecast of nearly $299.9 million. While KLA-Tencor's revenue from its services segment fell nearly 19 percent, its product segment — which accounts for the bulk of revenue — plunged by 56 percent.

But President and Chief Executive Rick Wallace said he saw some hopeful signs that business conditions will improve, despite economic turmoil that has forced many of his customers to cut their capital budgets.

"Although demand remains at low levels today, we are encouraged to see investments in technology development activity in the March quarter for customers at the leading edge," Wallace said.

KLA-Tencor announced fiscal third-quarter results after its shares fell 8 cents to close at $25.70. The stock has ranged from $14.81 to $47.07 over the past year.