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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 group , KLA-Tencor has higher exposure to the Foundry segment. We believe Foundry semi device manf will continue to lead the semi capex cyclical upturn in C1H12 which will cause the stock to outperform in our view, thus our new Overweight rating," JPMorgan's Blansett wrote in his research note. He raised his price target to $58 from $52, and kept his overweight rating.

KLA-Tencor is up nearly 7% this year, according to Google Finance.

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