Updated from July 29

KLA-Tencor ( KLAC) said fourth-quarter profit roughly tripled to $96.2 million from last year's levels of $29.4 million.

On a per-share basis, net income totaled 48 cents, 3 cents ahead of expectations and far above last year's fourth-quarter EPS of 15 cents.

Friday morning, KLA shares were $1.14, or 2.9%, to $39.95. In regular trading Thursday, the stock closed up $1, or 2.6%, to $38.81.

KLA makes gear that helps chipmakers scout out defects and increase yields in the chip-manufacturing process. Revenue for the San Jose, Calif.-based chip-equipment supplier rose 46% to $450.4 million, compared to the consensus estimate of $452 million.

A cost-reduction drive pushed up gross margins by two percentage points to 58%, up from 56% in the prior quarter.

KLA said its inventory increased by $27 million to $337 million as it boosted production to meet customer demand.

Though KLA did not elaborate on its order pattern in its press release, the company said at an investment banking conference on July 13 that its new orders had stayed flat in the fourth quarter.

In its earnings release in April, KLA had unnerved Wall Street with an unusually wide orders forecast, saying bookings could rise as much as 10% or fall as much as 15% in the June quarter. In July, KLA management explained that it had closed one of two large orders in the June quarter, with the other order closing in early July.

For the full fiscal year 2004, the company notched a profit of $244 million, or $1.21 per diluted share, on revenue of $1.5 billion. Net income showed robust growth from the prior year's $137 million, or 70 cents per diluted share, with sales up from $1.3 billion in its 2003 fiscal year.

In a statement, Chief Executive Ken Schroeder said: "Our strong financial performance for both the quarter and the year is the direct result of our customers' escalating investments in process control to help them stay on Moore's law and become the low-cost producer of advanced chips.

"This trend is intensifying with each new device generation, since process control helps semiconductor manufacturers speed technology ramps, increase manufacturing yields and lower their capital costs by extending the life of their existing process toolsets. As a result, process control continues to represent a larger portion of our customers' capital budgets."