As we reflect back on the just completed Q1 semiconductor manufacturing sector earnings season, we dig into the relative performance of 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 growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 3.16%, while on average next quarter revenue guidance was 1.49% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again, but semiconductor manufacturing stocks held their ground better than others, with the share prices up 20.8% since the previous earnings results, on average.
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 $2.43 billion, up 6.29% year on year, beating analyst expectations by 2.36%. It was a mixed quarter for the company, with a beat on the bottom line but an increase in inventory levels.
"The March quarter delivered revenue, GAAP and non-GAAP earnings per share above the midpoint of the guidance ranges, reflecting solid execution in a challenging industry environment," said Rick Wallace, president and CEO of KLA Corporation.
The stock is up 31.4% since the results and currently trades at $470.1.
Is now the time to buy KLA Corporation? Access our full analysis of the earnings results here, it's free.
Best Q1: Photronics (NASDAQ:PLAB)
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 $229.3 million, up 12.1% year on year, beating analyst expectations by 8.68%. It was an exceptional quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above analysts' estimates.
Photronics pulled off the strongest analyst estimates beat among its peers. The stock is up 36.5% since the results and currently trades at $23.5.
Is now the time to buy Photronics? Access our full analysis of the earnings results here, it's free.
Weakest Q1: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of most of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers that are used for cutting, welding and processing raw materials.
IPG Photonics reported revenues of $347.2 million, down 6.16% year on year, beating analyst expectations by 5.01%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in inventory levels.
The stock is up 14.4% since the results and currently trades at $135.05.
Read our full analysis of IPG Photonics's results here.
Teradyne (NASDAQ:TER)
With most major chip manufacturers as customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technology and devices.
Teradyne reported revenues of $617.5 million, down 18.2% year on year, beating analyst expectations by 2.4%. It was a mixed quarter for the company, with a beat on the bottom line but a decline in operating margin.
The stock is up 18.5% since the results and currently trades at $110.5.
Read our full, actionable report on Teradyne here, it's free.
Semtech (NASDAQ:SMTC)
Operating for more than 60 years, Semtech (NASDAQ:SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and Cloud connectivity.
Semtech reported revenues of $236.5 million, up 17% year on year, in line with analyst expectations. Despite the stock rising on the results, it was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in operating margin.
The stock is up 0.9% since the results and currently trades at $22.64.
Read our full, actionable report on Semtech here, it's free.
The author has no position in any of the stocks mentioned