KLA Corp anticipates strong fourth-quarter revenue, exceeding estimates, driven by surging demand for its chipmaking equipment. Semiconductor manufacturers are increasing production of high-end processors essential for artificial intelligence applications.
Despite this positive outlook, KLA's shares experienced a decline of over 7% in extended trading. Year-to-date, the company's stock had seen substantial gains, reflecting increased investment in chipmaking equipment spurred by the demand for processors powering large language models and AI.
The company projects fourth-quarter revenue between $3.38 billion and $3.78 billion, with analysts anticipating $3.54 billion. KLA also forecasts an adjusted profit per share of $9.87, plus or minus $1.00, slightly above the expected $9.80.
The escalating demand for complex AI chips intensifies the need for process control, driving demand for KLA's specialized tools. These tools are critical for identifying and rectifying microscopic defects during chip manufacturing, ensuring high production yields and managing costs in an increasingly precise process. KLA's services business also provides a consistent revenue stream through equipment maintenance and optimization.
Earlier this year, KLA announced a significant $7 billion share buyback program and a 21% increase in its quarterly dividend. In the preceding quarter, the company reported revenue of $3.42 billion and an adjusted profit of $9.40 per share, both surpassing analyst expectations.