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KLA Corp. (KLAC) to Report Q2 Earnings: What's in Store?

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KLA Corporation KLAC is scheduled to report fiscal second-quarter 2022 results on Jan 27.

For the fiscal second quarter, the company expects revenues between $2.23 billion and $2.43 billion. The Zacks Consensus Estimate for sales is pegged at $2.33 billion, indicating growth of 40.9% from the year-ago reported value.

Further, it anticipates non-GAAP earnings per share in the range of $4.95-$5.85 for fiscal second-quarter 2022. The consensus mark for earnings per share is pegged at $5.43, indicating a 67.6% rise from the previous-year reported figure.

It surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 6.46%.

KLA Corporation Price and EPS Surprise

KLA Corporation Price and EPS Surprise
KLA Corporation Price and EPS Surprise

KLA Corporation price-eps-surprise | KLA Corporation Quote

Key Factors to Note

Strong momentum in core markets and increasing customer demand across each of KLA’s major product groups are likely to have aided the company’s fiscal second-quarter performance.

The growing demand for semiconductors for accelerating digitization across multiple industries and related end markets is anticipated to have remained a key growth driver in the quarter under review.

Solid momentum in wafer fabrication equipment is expected to have continued aiding its performance in the to-be-reported quarter.

Further, continuous investments in advanced laser, sensor, optics and data analytics technologies might have been tailwinds.

The growing adoption of metrology applications in leading-edge technology development and capacity monitoring is likely to have remained a positive for the optical metrology business in the fiscal second quarter.

Strength in optical pattern wafer inspection is anticipated to have persistently driven the company’s semiconductor process control segment in the quarter under review.

Increasing investments in the advanced packaging market for boosting the adoption of new technologies might get reflected in the soon-to-be-reported quarterly results.

Growing investments in foundry, logic and memory might have contributed well to the semiconductor process control systems business in the quarter under discussion.

Yet, uncertainties related to the ongoing coronavirus pandemic might get reflected in the upcoming quarterly results. Also, supply chain challenges are expected to have been concerns.

Further, higher manufacturing costs and increasing operating expenses due to continuous investment in the global infrastructure, new product development programs and volume-dependent resources are likely to have hurt the company’s profitability.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for KLA this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It has an Earnings ESP of -0.57% and a Zacks Rank #3, at present.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Endava DAVA has an Earnings ESP of +0.85% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Endava is scheduled to release second-quarter fiscal 2022 results on Feb 16. The Zacks Consensus Estimate for DAVA’s earnings is pegged at 59 cents per share, suggesting an increase of 55.26% from the prior-year reported figure.

Monolithic Power Systems MPWR has an Earnings ESP of +2.83% and a Zacks Rank #2 at present.

Monolithic Power Systems is set to report fourth-quarter 2021 results on Feb 10. The Zacks Consensus Estimate for MPWR’s earnings is pegged at $1.87 per share, which suggests an increase of 42.75% from the prior-year reported figure.

Alphabet GOOGL has an Earnings ESP of +7.33% and a Zacks Rank #3 at present.

Alphabet is scheduled to release fourth-quarter 2021 results on Feb 1. The Zacks Consensus Estimate for GOOGL’s earnings is pegged at $26.69 per share, which suggests an increase of 19.69% from the prior-year reported figure.


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