Jan 29 (Reuters) - KLA Corp (KLAC.O) beat Wall Street expectations for second-quarter revenue and profit on Thursday, as enterprises ramped up orders for its chip fabrication tools used to manufacture advanced artificial intelligence semiconductors.
A surge in demand for powerful processors, which fuel large language models and AI applications, has boosted spending on chipmaking equipment made by companies such as KLA.
However, KLA’s shares fell around 7% in extended trading despite the upbeat results.
“The problem is that the stock had already sprinted into the print, hitting fresh highs with expectations that were arguably loftier than the published consensus,” said Michael Ashley Schulman, chief investment officer of Running Point Capital Advisors.
KLA faces an uncertain long-term outlook, with demand in China challenged due to government mandates on locally sourcing advanced chipmaking tech.
Moreover, the U.S. has imposed restrictions on the export of advanced technology to China in an effort to prevent the Asian nation from using American tech to supercharge its military.
“What KLA offered for the March quarter looks like steady growth rather than renewed acceleration,” Schulman added.
Peer Lam Research (LRCX.O) gave an upbeat quarterly forecast on Wednesday, bolstered by strong demand for chipmaking tools.
KLA reported second-quarter revenue of $3.3 billion, beating analysts’ average estimate of $3.25 billion, according to data compiled by LSEG.
The company earned $8.85 per share on an adjusted basis, compared with profit estimates of $8.80 per share.
KLA forecast third-quarter revenue of $3.35 billion, plus or minus $150 million, compared with estimates of $3.28 billion.
It projected adjusted earnings per share of $9.08, plus or minus 78 cents, while analysts expect $8.94 per share.

KLA Corpexceeded Wall Street's expectations for Q2 revenue and profit, driven by increased orders for chip fabrication tools amid rising demand for AI semiconductors. Despite reporting $3.3 billion in revenue and adjusted earnings of $8.85 per share, KLA's shares fell 7% in after-hours trading due to previously high expectations. The company faces challenges in the long-term outlook, particularly with demand in China affected by government restrictions. KLA forecasts Q3 revenue of $3.35 billion and adjusted earnings of $9.08 per share, both above analyst estimates.

Reuters

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KLA Corp beats quarterly results estimates on strong chipmaking tool demand