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Why Is KLA (KLAC) Up 4.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for KLA (KLAC - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is KLA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
KLA reported fourth-quarter fiscal 2024 non-GAAP earnings of $6.60 per share, beating the Zacks Consensus Estimate by 8.55%. The figure jumped 25.5% year over year.
Revenues increased 9.1% year over year to $2.57 billion, surpassing the Zacks Consensus Estimate by 2.57%. Sequentially, revenues increased 9%.
In terms of reportable segments, Semiconductor Process Control revenues (89.8% of total revenues) increased 10% year over year to $2.31 billion. Sequentially, revenues increased 10%.
Foundry & Logic accounted for about 82%, while Memory constituted about 18% of Semiconductor Process Control revenues. Within memory, approximately 82% was from DRAM and 22% was from NAND.
Specialty Semiconductor Process revenues (4.7% of total revenues) were $121.3 million, down 6% year over year. Revenues fell 7% on a sequential basis.
PCB, Display and Component Inspection revenues (5.5% of total revenues) increased 8.6% year over year to $140 million.
Top-Line Details
Product revenues (accounted for 76.1% of total revenues) increased 7.6% year over year to $1.96 billion. Service revenues (23.9% of total revenues) increased 14% year over year to $613.9 million.
In terms of major products, Wafer Inspection and Patterning Systems (including metrology and reticle inspection) accounted for 46% and 21%, respectively, of KLA’s total revenues for the fiscal fourth quarter.
Wafer Inspection revenues increased 23% year over year and 18% sequentially to $1.17 billion. Patterning revenues declined 7% year over year but inched up 1% sequentially to $542 million.
In terms of regional breakdown of revenues, China and Taiwan accounted for 44% and 20% of revenues, respectively. Each of Japan and Korea accounted for 7% of revenues. Further, North America contributed 12% of revenues. Each of Europe and the Rest of Asia accounted for 5% of revenues.
Operating Details
In fourth-quarter fiscal 2024, the non-GAAP gross margin was 62.5%, 10 basis points (bps) above the guidance range.
Research and development (R&D) expenses increased 2.7% year over year to $325.8 million. As a percentage of sales, R&D expenses decreased 80 bps year over year to 12.7%. Selling, general and administrative (SG&A) expenses increased 1.7% year over year to $255.1 million. As a percentage of sales, SG&A expenses decreased 70 bps year over year to 9.9%.
Non-GAAP operating expenses were $552.5 million, up 1.5% sequentially. Non-GAAP operating expenses comprised $323.5 million in R&D and $229 million in SG&A expenses.
The fiscal fourth-quarter non-GAAP operating margin was 41%, up 50 bps sequentially.
Balance Sheet
As of Jun 30, 2024, cash, cash equivalents and marketable securities totaled $4.5 billion compared with $4.3 billion as of Mar 31, 2024. Long-term debt at the end of the fiscal fourth quarter was $5.88 billion, down from $6.7 billion reported in the previous quarter.
Cash flow from operating activities was $892.6 million for the reported quarter, down from $910 million in the prior quarter. Free cash flow was $831.9 million for the fiscal fourth quarter.
During the fiscal fourth quarter, KLAC paid out $197.5 million in dividends and repurchased $470.3 million worth of shares.
First-Quarter Fiscal 2025 Guidance
For first-quarter fiscal 2025, revenues are expected to be $2.75 billion, plus/minus $150 million. KLA expects non-GAAP earnings of $7 per share, plus/minus 60 cents.
KLA expects a non-GAAP gross margin of 61.5%, plus/minus 1%. Operating expenses are expected in the September quarter between $559 million and $571 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 9.07% due to these changes.
VGM Scores
At this time, KLA has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, KLA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is KLA (KLAC) Up 4.7% Since Last Earnings Report?
It has been about a month since the last earnings report for KLA (KLAC - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is KLA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
KLA's Q4 Earnings & Revenues Beat Estimates, Rise Y/Y
KLA reported fourth-quarter fiscal 2024 non-GAAP earnings of $6.60 per share, beating the Zacks Consensus Estimate by 8.55%. The figure jumped 25.5% year over year.
Revenues increased 9.1% year over year to $2.57 billion, surpassing the Zacks Consensus Estimate by 2.57%. Sequentially, revenues increased 9%.
In terms of reportable segments, Semiconductor Process Control revenues (89.8% of total revenues) increased 10% year over year to $2.31 billion. Sequentially, revenues increased 10%.
Foundry & Logic accounted for about 82%, while Memory constituted about 18% of Semiconductor Process Control revenues. Within memory, approximately 82% was from DRAM and 22% was from NAND.
Specialty Semiconductor Process revenues (4.7% of total revenues) were $121.3 million, down 6% year over year. Revenues fell 7% on a sequential basis.
PCB, Display and Component Inspection revenues (5.5% of total revenues) increased 8.6% year over year to $140 million.
Top-Line Details
Product revenues (accounted for 76.1% of total revenues) increased 7.6% year over year to $1.96 billion. Service revenues (23.9% of total revenues) increased 14% year over year to $613.9 million.
In terms of major products, Wafer Inspection and Patterning Systems (including metrology and reticle inspection) accounted for 46% and 21%, respectively, of KLA’s total revenues for the fiscal fourth quarter.
Wafer Inspection revenues increased 23% year over year and 18% sequentially to $1.17 billion. Patterning revenues declined 7% year over year but inched up 1% sequentially to $542 million.
In terms of regional breakdown of revenues, China and Taiwan accounted for 44% and 20% of revenues, respectively. Each of Japan and Korea accounted for 7% of revenues. Further, North America contributed 12% of revenues. Each of Europe and the Rest of Asia accounted for 5% of revenues.
Operating Details
In fourth-quarter fiscal 2024, the non-GAAP gross margin was 62.5%, 10 basis points (bps) above the guidance range.
Research and development (R&D) expenses increased 2.7% year over year to $325.8 million. As a percentage of sales, R&D expenses decreased 80 bps year over year to 12.7%. Selling, general and administrative (SG&A) expenses increased 1.7% year over year to $255.1 million. As a percentage of sales, SG&A expenses decreased 70 bps year over year to 9.9%.
Non-GAAP operating expenses were $552.5 million, up 1.5% sequentially. Non-GAAP operating expenses comprised $323.5 million in R&D and $229 million in SG&A expenses.
The fiscal fourth-quarter non-GAAP operating margin was 41%, up 50 bps sequentially.
Balance Sheet
As of Jun 30, 2024, cash, cash equivalents and marketable securities totaled $4.5 billion compared with $4.3 billion as of Mar 31, 2024. Long-term debt at the end of the fiscal fourth quarter was $5.88 billion, down from $6.7 billion reported in the previous quarter.
Cash flow from operating activities was $892.6 million for the reported quarter, down from $910 million in the prior quarter. Free cash flow was $831.9 million for the fiscal fourth quarter.
During the fiscal fourth quarter, KLAC paid out $197.5 million in dividends and repurchased $470.3 million worth of shares.
First-Quarter Fiscal 2025 Guidance
For first-quarter fiscal 2025, revenues are expected to be $2.75 billion, plus/minus $150 million. KLA expects non-GAAP earnings of $7 per share, plus/minus 60 cents.
KLA expects a non-GAAP gross margin of 61.5%, plus/minus 1%. Operating expenses are expected in the September quarter between $559 million and $571 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 9.07% due to these changes.
VGM Scores
At this time, KLA has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, KLA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.