But despite the positive early signs for 2007, it is still expected to be a slow year in the chip-equipment market, as previously reported. ''We believe that overcapacity, price and margin pressures will prevent aggressive spending in 2007,'' said David Motozo Rubenstein, an analyst with Jefferies Japan Ltd., in a new report on chip-equipment giant TEL.

On Tuesday (Feb. 6), TEL (Tokyo), the world's second largest fab-tool maker, reported a profit of 30 billion yen ($249.7 million) in its third fiscal quarter, up 166 percent from the like period a year ago. Citing a boom in the DRAM and flash memory sectors, TEL's sales were 210.1 billion yen ($1.7 billion) in the quarter, up 44.8 percent.

Semiconductor-equipment sales for TEL were 158.8 billion yen ($1.3 billion) in the period, up 51.9 percent. ''Memory orders as a percentage of total orders hit a near-term record of 71 percent,'' Rubenstein said.

''Despite ominous price compression in DRAM, management believes that DRAM makers will continue to order gear unfazed,'' he said. ''Our view remains less sanguine.''

On Monday (Feb. 5), KLA-Tencor reported its numbers, which fell slightly short of expectations due to order pushouts. The company reported net income of $90 million, or $0.44 a share, on revenue of $649 million in the second quarter.

This compared to net income of $136 million, or $0.67 per diluted share, on revenue of $629 million in the first quarter of fiscal 2007, and compared to net income of $77 million, or $0.38 per diluted share, on revenue of $488 million in the second quarter of fiscal 2006.

''Although KLAC reported a shortfall for the December quarter, revenue expectations (as a result of $15 million worth of shipment pushed out from the December quarter into the March quarter), for the company's March quarter revenue guidance, excluding the $15 million, is still about 3 percent above our previous estimate/consensus,'' according to a new report from FBR Research.

''Going forward, increased foundry bookings (from the current 15-to-25 percent) is expected to help offset the declining memory bookings in the second half of CY07,'' according to the report.

Meanwhile, KLA-Tencor's bottom line was mixed in the quarter, if not ugly. Its net income for the second quarter of fiscal 2007 reflects $117 million pre-tax charges. The company realized one-time charges of $67 million, including $57 million for the write-down of buildings and related assets, and $10 million for severance charges related to a reduction in force.

It also assumed acquisition-related charges of $19 million for in-process R&D and amortization of intangible assets primarily related to the acquisition of ADE Corp.

It also realized a net stock-based compensation charges of $16 million, net of a credit of $20 million related to the cancellation of a former executive's stock options and restricted stock units that had been previously expensed.. Stock-based compensation for first quarter of fiscal 2007 was $37 million and for second quarter of fiscal 2006 was $39 million.

KLA-Tencor had restatement-related charges of $15 million, including compensation expense of $11 million related to the reimbursement of non-executive employees for penalty taxes under Section 409A of the Internal Revenue Code and legal and other expenses of $4 million related to the stock options investigation, shareholder litigation and related matters. Other restatement-related charges for first quarter of fiscal 2007 were $3 million.

''With the restatement of our financials recently completed, we return to regular quarterly reporting and move forward with our business with confidence. We remain focused on introducing new products that help our customers meet their mission critical production challenges,'' said Rick Wallace, CEO of KLA-Tencor, in a statement.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved