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KLA-Tencor Surges on Samsung Spending Plans: San Francisco Mover

Jan. 25 (Bloomberg) -- KLA-Tencor Corp., a maker of machinery used to produce semiconductors, rose the most in more than three years after one of its biggest customers, Samsung Electronics Co., said it would keep investing in new equipment.

KLA advanced 8.4 percent to $56.34 at the close in New York, for the biggest gain since June 1, 2009. The stock has risen 10 percent in the past 12 months, compared with a 13 percent climb in the Standard & Poor’s 500 index.

Samsung, the world’s largest maker of mobile phones, TVs and computer-memory chips, said yesterday that it will maintain capital spending for this year at 2012 levels. Analysts had speculated that Samsung to reduce semiconductor spending by as much as 40 percent, said Ben Pang, an analyst at B. Riley & Co.

“Investors were concerned about which company would fill the gap,” Pang said. Taiwan Semiconductor Manufacturing Co., KLA’s largest customer, has said it plans to limit most capital outlays to the first half of 2013, he said. “Samsung can certainly fill the gap.”

Before Samsung laid out its spending plan, KLA yesterday forecast fiscal third-quarter earnings excluding some items of 76 cents to 96 cents a share on revenue of $690 million to $750 million. The per-share forecast assumes a new, lower tax rate, and it beat analysts’ average estimate for profit of 77 cents on sales of $700 million, according to data compiled by Bloomberg.

Mobility ‘Force’

The Milpitas, California-based company, which makes tools that verify the proper completion of different stages in chip production, is benefiting from surging demand for mobile devices, Chief Executive Officer Richard Wallace said on a conference call with investors yesterday.

“Consumer demand for mobility continues to be the primary force behind semiconductor industry demand,” Wallace said.

Gross bookings in the third quarter, which ends in March, will be $700 million to $850 million, the company said. The earnings forecast assumes an effective tax rate of 18 percent to account for the reinstatement of a research and development credit.

Applied Materials Inc, the largest maker of chip equipment, rose 1.8 percent to $12.83. Lam Research Corp., which also produces circuit-making gear, rose 5.6 percent to $41.73.

To contact the reporters on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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