Silence is Golden for KLA-Tencor
Shares of semiconductor equipment maker KLA-Tencor (KLAC) surged nearly six percent in after-hours trading following the release of this press release:
KLA-Tencor Corporation today announced that its revenue for the quarter ended September 30, 2006, the first quarter of fiscal 2007, was $630 million, compared to $579 million for the fourth quarter of fiscal 2006 and $484 million for the first quarter of fiscal 2006.”We had strong performance this quarter as semiconductor manufacturers continue to invest in process control for 65nm production and 45nm development,” stated Rick Wallace, chief executive officer of KLA-Tencor. “Our products and services deliver the most advanced process control technology to help our customers shorten their development, ramp faster and increase their yields.”
What it won’t help their customers do is control the inventory glut. ST Microelectronics (STM) and Intel (INTC - Annual Report) have woken up to the need to curtail capacity expansion. When the other semi makers do the same, orders are likely to fall off quickly. Meanwhile, although 30% growth year/year is certainly better than most of the tech universe, we have noted frequently that revenues for the semiconductor equipment industry as a whole have been growing at twice that rate in recent months. Is KLA-Tencor losing share? We won’t find out on the conference call, where CFO Jeffrey Hall said:
Before I turn the call over to Rick, let me remind you that as we’ve previously announced, we are in the process of restating our financial statements and expect to record non-cash, share-based compensation charges that are not anticipated to exceed $400 million. Let me also remind you that as a result of the pending restatement we are you unable to provide detailed GAAP or non-GAAP financials for the quarter ended September 30, 2006.
On this call we will not be able to provide any specifics about our gross margin, operating expenses, inventory, taxes, or other item that might be affected by share-based compensation.
With little to talk about, KLA-Tencor is benefitting from a misplaced faith that no news is good news. In fact, we think their accounting do-over will soon be the least of their problems.
Disclosure: William Trent has a long position in SMH.
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[…] As you may guess, we are not surprised. But what’s done is done, and while 2006 is essentially in the bag what about the forecasts for 2007 and 2008? The chart below shows the year/year growth rate in semiconductor sales for each month going back to 1998. Data is courtesy of the Semiconductor Industry Association (SIA). […]