Unpacking Q3 Earnings: KLA Corporation (NASDAQ:KLAC) In The Context Of Other Semiconductor Manufacturing Stocks
Looking back on semiconductor manufacturing stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including KLA Corporation (NASDAQ:KLAC) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.
Thankfully, share prices of the companies have been resilient as they are up 6.8% on average since the latest earnings results.
KLA Corporation (NASDAQ:KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $2.84 billion, up 18.5% year on year. This print exceeded analysts’ expectations by 3.1%. Overall, it was a very strong quarter for the company with a significant improvement in its inventory levels and an impressive beat of analysts’ adjusted operating income estimates.
"KLA's September quarter results demonstrate continued outperformance with results above expectations and consistent with our expectation of sequential quarterly growth in revenue over the course of the current calendar year," said Rick Wallace, president and CEO, KLA Corporation.
KLA Corporation Total Revenue
Interestingly, the stock is up 10.2% since reporting and currently trades at $762.62.
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.52 billion, up 6.9% year on year, outperforming analysts’ expectations by 4%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.
Marvell Technology Total Revenue
The market seems happy with the results as the stock is up 31.1% since reporting. It currently trades at $125.81.
With fabs representing the company’s largest customer type, Entegris (NASDAQ:ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Entegris reported revenues of $807.7 million, down 9.1% year on year, falling short of analysts’ expectations by 3%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations.
Entegris delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 1.2% since the results and currently trades at $105.87.
Both a designer and manufacturer of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.
IPG Photonics reported revenues of $233.1 million, down 22.6% year on year. This number topped analysts’ expectations by 2.3%. Zooming out, it was a slower quarter as it logged a significant miss of analysts’ adjusted operating income and EPS estimates.
IPG Photonics had the slowest revenue growth among its peers. The stock is down 3.5% since reporting and currently trades at $76.54.
Sporting a global footprint of facilities, Photronics (NASDAQ:PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Photronics reported revenues of $222.6 million, down 2.1% year on year. This print surpassed analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EPS estimates and revenue guidance for next quarter slightly topping analysts’ expectations.
The stock is down 6.6% since reporting and currently trades at $23.67.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
