KLA-Tencor recently reporting better than expected second-quarter earnings and raised third-quarter guidance, and shares of the semiconductor-equipment company hit a 52-week high following the results.
The company reported second-quarter earnings of 72 cents per share on $642 million in revenue. Wall Street analysts polled by Thomson Reuters expected earnings of 66 cents per share on $631 million.KLA-Tencor also provided strong third-quarter guidance. This signals the much-talked-about rebound could potentially be on the way in 2012. It expects revenue to be between $770 million and $830 million, and earnings between $1 and $1.18 per share. Analysts had been expecting much lower third-quarter results, but have since moved up their estimates. Wall Street analysts polled by Thomson Reuters now expect $800.02 million in revenue and $1.10 per share in earnings, at the mid-point of KLA-Tencor's guidance. "Things are starting to pick up in the chip-equipment space. Business conditions are improving, and we expect somewhat of a recovery in 2012. There is a spending rebound going on by the leading chip-equipment makers," Morningstar analyst Andy Ng said in a phone interview. He believes KLA-Tencor is poised to outperform the other chip-equipment markers because of its technological advantages. Ng has a fair value of $51 on KLA-Tencor. Following the strong earnings report, there were several price target raises, with JPMorgan analyst Christopher Blansett being among the most bullish. "Compared to its peer