Kulicke & Soffa Expects to Beat First-Quarter EPS Views

The chip-equipment maker forecasts first-quarter earnings 30% above expectations.
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Updated from 8:10 a.m. EST

Kulicke & Soffa Industries

(KLIC) - Get Report

, the world's largest supplier of semiconductor assembly equipment, is set to beat first-quarter earnings expectations, the company said Tuesday.

Revenue for the first quarter ended Dec. 31 is expected to be in the $175 million range, with earnings per share exceeding the consensus estimate of 36 cents by more than 30%, the company said.

The company attributed the strong numbers to increased demand for its Model 8028 wire bonder product and overall improvements in the industry.

Kulicke & Soffa has benefited greatly from the increase in demand for semiconductor units. In fact, companies throughout the semiconductor capital equipment industry are doing well. Kulicke & Soffa is also taking advantage of its market-leader status. "The overall demand for wire bonding equipment is very strong," said analyst Vernon Essi of

Adams, Harkness & Hill

, "and they hold a leadership position at the high end of the market, in terms of technology and market share." It was announced Monday night that

Orient Semiconductor Electronics

, an assembly subcontractor, ordered 300 Model 8028 wire bonders for its production facility in Kaohsiung, Taiwan.

Essi rates Kulicke & Soffa a strong buy and his firm has not done any underwriting for the company.

Also, "they are expanding into Asia, with a new plant in Singapore in addition to its U.S. plants," said analyst David Wu of

ABN Amro

, who rates the company a buy, his firm's highest rating. "They have capacity in a period of capacity shortage." ABN Amro has not participated in recent underwriting for Kulicke & Soffa.

Kulicke & Soffa's new estimate is 8 cents above Wu's original aggressive estimate of 40 cents a share for the quarter. "We saw the business getting better and their competitors doing better, so we figured the market leader would do better too," he commented. The company's main competitors are Switzerland's

Esec Holding

, Japan's

Shinkawa

and Hong Kong's

ASM Pacific Technology

.

Shares of the Willow Grove, Pa.-based firm were trading up 1 11/16, or 4%, to 43 1/8 early Tuesday. (Kulicke & Soffa ended up Tuesday 1 9/16, or 4%, to 42 5/16.)

Kulicke & Soffa is scheduled to report earnings during the week of Jan. 17.