By Anhata Rooprai
April 29 (Reuters) – KLA Corp forecast quarterly revenue above estimates on Thursday, banking on strong demand for its chipmaking tools as semiconductor manufacturers ramp up production of high-end processors for artificial intelligence.
However, shares of the Milpitas, California-based company fell nearly 9% in extended trading, with some analysts saying the market had expected a higher guidance.
As of Wednesday’s close, KLA’s shares had gained about 50% this year, as rising demand for processors powering large language models and AI applications fueled spending on chipmaking equipment made by companies such as KLA Corp.
The company expects fourth-quarter revenue of $3.58 billion, plus or minus $200 million, compared with analysts’ average estimate of $3.54 billion, according to data compiled by LSEG.
It also forecast an adjusted profit of $9.87 per share for the period, plus or minus $1.00. Analysts expect a profit of $9.80 per share.
“June-quarter guidance was only near expectations and reflected some memory-related margin pressure, and investors are selling off anything less than massive beats in this environment given lofty expectations and pricy valuations,” CFRA analyst Brooks Idlet said.
Last week, peer Lam Research had forecast fourth-quarter revenue above Wall Street estimates.
The soaring demand for complex AI chips has increased process-control intensity, ramping up the need for tools that can help ensure high production yields and manage costs as the chipmaking process becomes more difficult and precise.
KLA’s tools are used for finding and fixing microscopic defects during the chipmaking process. Its services business, which provides maintenance and optimization for its equipment, also offers the company a recurring revenue stream.
Last month, the company announced a $7 billion share buyback program and a 21% increase in its quarterly dividend.
KLA reported revenue of $3.42 billion in the third quarter, beating estimates of $3.37 billion. Adjusted profit came in at $9.40 per share, compared with estimates of $9.14.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Jonathan Ananda)
