KLA-Tencor Earnings Drop Sharply

The chip-equipment company's income dropped 37% from last year.
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Updated from 5 p.m. EDT

In the final quarter of its fiscal year 2003, chip-equipment vendor

KLA-Tencor

(KLAC) - Get Report

saw profits and sales drop sharply from the same quarter last year.

Net income of $29 million plunged 37% in the June quarter. Earnings of 15 cents per share were in line with expectations.

Sales of $308.3 million were down 17% from the second quarter last year and a hair below the consensus estimate for $309.4 million.

"Although the increase in business activity is not broad-based, we are definitely seeing a number of our customers reporting an upturn in their business," said CEO Ken Schroeder in a prepared statement.

KLAC said it usually sees sequential revenue drop 10% or more in the September quarter. This year it expects sales to climb somewhat, to a range of $310 million to $315 million.

But its relatively strong outlook still leaves revenue well below Wall Street's expectation for $334 million.

September quarter EPS should fall between 16 cents and 17 cents, compared with the consensus estimate for 18 cents.

"We're cautious about the timing of a sustained recovery," said Chief Financial Officer John Kispert on a conference call.

Separately, the company said the $1.32 billion in revenue in its just-ended fiscal year 2003 was 19% below 2002.

Shares dipped 64 cents or 1.2% to $51.49 after the close. In regular trading, the stock closed down $1.28 or 2.4% to $52.13.