01—Abstract
Summary
Summary of the 10-Q filed January 27, 2012. Cited figures are marked; the original filing is the authoritative source.
KLA Corp (KLAC) reported its fiscal second quarter results for the period ending December 31, 2011.
Total revenues for the quarter were $642.5 milliona, a decrease of 16% compared to the same period last year. This decline was primarily driven by a 20% drop in product revenues, attributed to customers reassessing capacity expansion plans amidst industry slowdown and macroeconomic uncertainty. Despite the revenue decrease, the company maintained a solid gross margin of 57.5% for the quarter.
Net income for the quarter was $110.8 millionb, or $0.66 per diluted share, down from $185.5 million, or $1.09 per diluted share, in the prior year's comparable quarter. The company continues to invest in research and development, with R&D expenses increasing by 23% year-over-year to support next-generation products. KLA Corp ended the period with a strong liquidity position, holding $2.2 billion in cash, cash equivalents, and marketable securities, while managing its debt obligations and continuing its stock repurchase program and dividend payments.
02—Key points
Key Highlights
- Total revenues for the quarter ended December 31, 2011, were $642.5 million, a decrease of 16% compared to the prior year's quarter.
- Product revenues saw a significant decrease of 20% year-over-year, attributed to customer reassessment of capacity expansion plans due to industry slowdown and macroeconomic uncertainty.
- Net income for the quarter was $110.8 million ($0.66 per diluted share), down from $185.5 million ($1.09 per diluted share) in the prior year.
- Gross margin remained robust at 57.5%, although slightly down from 59.4% in the prior year's quarter, indicating effective cost management.
- Research and Development (R&D) expenses increased by 23% year-over-year to $116.4 million, reflecting continued investment in future technologies.
- The company maintained a strong liquidity position with $2.2 billion in cash, cash equivalents, and marketable securities as of December 31, 2011.
- KLA Corp continued its capital return to shareholders through stock repurchases and a declared dividend of $0.35 per share for the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2012, KLA Corp kept $0.17.
- Revenue$642.5M100.0%
- Cost of revenue−$272.9M42.5%
- Gross profit$369.6M57.5%
- Operating costs−$210.2M32.7%
- Operating income$159.5M24.8%
- Interest, other & tax−$48.7M7.6%
- Net income$110.8M17.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2012filed January 27, 2012Financial Statements
Q2 FY2012 against Q2 FY2011
| Line item | Q2 FY2012Q2 FY2011 | Change |
|---|---|---|
| Revenue | $642.48M$766.33M | −16.2% |
| Cost of Revenue | $272.86M$311.40M | −12.4% |
| Gross Profit | $369.63M$454.93M | −18.8% |
| R&D Expenses | $116.36M$94.90M | +22.6% |
| SG&A Expenses | $93.80M$91.17M | +2.9% |
| Operating Expenses | $483.02M$497.46M | −2.9% |
| Operating Income | $159.46M$268.87M | −40.7% |
| Interest Expense | $13.30M$13.49M | −1.5% |
| Net Income | $110.80M$185.49M | −40.3% |
| EPS (Basic) | $0.07$0.11 | −39.6% |
| EPS (Diluted) | $0.07$0.11 | −39.4% |
| Shares Outstanding (Basic) | 1.66B1.67B | −0.3% |
| Shares Outstanding (Diluted) | 1.69B1.70B | −0.2% |
05—Questions
Frequently Asked Questions
What was the primary driver for the decrease in KLA Corp's revenue this quarter?
The primary driver for the revenue decrease was a significant drop in product revenues, which fell by 20% year-over-year. This was due to customers reassessing their capacity expansion plans in response to a perceived industry slowdown and broader macroeconomic uncertainty.
How did KLA Corp manage its profitability despite the revenue decline?
KLA Corp maintained a strong gross margin of 57.5%. This was achieved through effective cost management in its cost of revenues and a strategic mix of products and services, allowing it to largely absorb the impact of lower revenue volumes.
What is KLA Corp's current liquidity position, and how is it being used?
As of December 31, 2011, KLA Corp held $2.2 billion in cash, cash equivalents, and marketable securities. This strong liquidity provides flexibility for ongoing operations, continued investment in R&D, and capital returns to shareholders, including stock repurchases and dividends. The company also has $750 million in long-term debt.
What is the outlook for KLA Corp based on this report?
The company anticipates an increase in revenues and earnings in the next quarter due to higher customer orders and increased deliveries, suggesting a potential recovery from the recent slowdown. KLA Corp remains committed to investing in R&D for future technologies, indicating a long-term growth strategy focused on addressing evolving customer needs in the semiconductor industry.
06—Continue