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KLA (KLAC) Reliance on International Sales: What Investors Need to Know
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Did you analyze how KLA (KLAC - Free Report) fared in its international operations for the quarter ending June 2024? Given the widespread global presence of this maker of equipment for manufacturing semiconductors, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.
The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While delving into KLAC's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.
For the quarter, the company's total revenue amounted to $2.57 billion, experiencing an increase of 9.1% year over year. Next, we'll explore the breakdown of KLAC's international revenue to understand the importance of its overseas business operations.
Trends in KLAC's Revenue from International Markets
Korea generated $175.14 million in revenues for the company in the last quarter, constituting 6.8% of the total. This represented a surprise of -53.3% compared to the $375 million projected by Wall Street analysts. Comparatively, in the previous quarter, Korea accounted for $201.29 million (8.5%), and in the year-ago quarter, it contributed $429.09 million (18.2%) to the total revenue.
Of the total revenue, $523.55 million came from Taiwan during the last fiscal quarter, accounting for 20.4%. This represented a surprise of -40.17% as analysts had expected the region to contribute $875 million to the total revenue. In comparison, the region contributed $433.92 million, or 18.4%, and $527.19 million, or 22.4%, to total revenue in the previous and year-ago quarters, respectively.
Japan accounted for 6.7% of the company's total revenue during the quarter, translating to $171.02 million. Revenues from this region represented a surprise of -54.39%, with Wall Street analysts collectively expecting $375 million. When compared to the preceding quarter and the same quarter in the previous year, Japan contributed $267.05 million (11.3%) and $185.03 million (7.9%) to the total revenue, respectively.
During the quarter, China contributed $1.15 billion in revenue, making up 44.6% of the total revenue. When compared to the consensus estimate of $375 million, this meant a surprise of +205.63%. Looking back, China contributed $996.89 million, or 42.2%, in the previous quarter, and $711.06 million, or 30.2%, in the same quarter of the previous year.
Europe & Israel accounted for 4.6% of the company's total revenue during the quarter, translating to $119.12 million. Revenues from this region represented a surprise of -4.71%, with Wall Street analysts collectively expecting $125 million. When compared to the preceding quarter and the same quarter in the previous year, Europe & Israel contributed $129.35 million (5.5%) and $139.28 million (5.9%) to the total revenue, respectively.
Prospective Revenues in International Markets
For the current fiscal quarter, it is anticipated by Wall Street analysts that KLA will report a total revenue of $2.76 billion, which reflects an increase of 15% from the same quarter in the previous year. The revenue contributions are expected to be 15% from Korea ($412.86 million), 20% from Taiwan ($550.48 million), 10% from Japan ($275.24 million), 30% from China ($825.71 million) and 5% from Europe & Israel ($137.62 million).
Analysts expect the company to report a total annual revenue of $11.52 billion for the full year, marking an increase of 17.4% compared to last year. The expected revenue contributions from Korea, Taiwan, Japan, China and Europe & Israel are projected to be 14.9% ($1.72 billion), 28.7% ($3.31 billion), 12.5% ($1.44 billion), 21% ($2.41 billion) and 5% ($572.16 million) of the total revenue, in that order.
In Conclusion
KLA's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.
With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.
At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.
Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.
Over the past month, the stock has seen a decline of 18.1% in its value, whereas the Zacks S&P 500 composite has posted a decrease of 5.9%. The Zacks Computer and Technology sector, KLA's industry group, has descended 12.9% over the identical span. In the past three months, there's been a decline of 1.9% in the company's stock price, against a rise of 1.5% in the S&P 500 index. The broader sector has increased by 0.1% during this interval.
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KLA (KLAC) Reliance on International Sales: What Investors Need to Know
Did you analyze how KLA (KLAC - Free Report) fared in its international operations for the quarter ending June 2024? Given the widespread global presence of this maker of equipment for manufacturing semiconductors, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.
The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While delving into KLAC's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.
For the quarter, the company's total revenue amounted to $2.57 billion, experiencing an increase of 9.1% year over year. Next, we'll explore the breakdown of KLAC's international revenue to understand the importance of its overseas business operations.
Trends in KLAC's Revenue from International Markets
Korea generated $175.14 million in revenues for the company in the last quarter, constituting 6.8% of the total. This represented a surprise of -53.3% compared to the $375 million projected by Wall Street analysts. Comparatively, in the previous quarter, Korea accounted for $201.29 million (8.5%), and in the year-ago quarter, it contributed $429.09 million (18.2%) to the total revenue.
Of the total revenue, $523.55 million came from Taiwan during the last fiscal quarter, accounting for 20.4%. This represented a surprise of -40.17% as analysts had expected the region to contribute $875 million to the total revenue. In comparison, the region contributed $433.92 million, or 18.4%, and $527.19 million, or 22.4%, to total revenue in the previous and year-ago quarters, respectively.
Japan accounted for 6.7% of the company's total revenue during the quarter, translating to $171.02 million. Revenues from this region represented a surprise of -54.39%, with Wall Street analysts collectively expecting $375 million. When compared to the preceding quarter and the same quarter in the previous year, Japan contributed $267.05 million (11.3%) and $185.03 million (7.9%) to the total revenue, respectively.
During the quarter, China contributed $1.15 billion in revenue, making up 44.6% of the total revenue. When compared to the consensus estimate of $375 million, this meant a surprise of +205.63%. Looking back, China contributed $996.89 million, or 42.2%, in the previous quarter, and $711.06 million, or 30.2%, in the same quarter of the previous year.
Europe & Israel accounted for 4.6% of the company's total revenue during the quarter, translating to $119.12 million. Revenues from this region represented a surprise of -4.71%, with Wall Street analysts collectively expecting $125 million. When compared to the preceding quarter and the same quarter in the previous year, Europe & Israel contributed $129.35 million (5.5%) and $139.28 million (5.9%) to the total revenue, respectively.
Prospective Revenues in International Markets
For the current fiscal quarter, it is anticipated by Wall Street analysts that KLA will report a total revenue of $2.76 billion, which reflects an increase of 15% from the same quarter in the previous year. The revenue contributions are expected to be 15% from Korea ($412.86 million), 20% from Taiwan ($550.48 million), 10% from Japan ($275.24 million), 30% from China ($825.71 million) and 5% from Europe & Israel ($137.62 million).Analysts expect the company to report a total annual revenue of $11.52 billion for the full year, marking an increase of 17.4% compared to last year. The expected revenue contributions from Korea, Taiwan, Japan, China and Europe & Israel are projected to be 14.9% ($1.72 billion), 28.7% ($3.31 billion), 12.5% ($1.44 billion), 21% ($2.41 billion) and 5% ($572.16 million) of the total revenue, in that order.
In Conclusion
KLA's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.
At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.
Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.
At the moment, KLA has a Zacks Rank #2 (Buy), signifying that it may outperform the overall market trend in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Examining the Latest Trends in KLA's Stock Value
Over the past month, the stock has seen a decline of 18.1% in its value, whereas the Zacks S&P 500 composite has posted a decrease of 5.9%. The Zacks Computer and Technology sector, KLA's industry group, has descended 12.9% over the identical span. In the past three months, there's been a decline of 1.9% in the company's stock price, against a rise of 1.5% in the S&P 500 index. The broader sector has increased by 0.1% during this interval.