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Semiconductor Manufacturing Q3 Earnings: KLA Corporation (NASDAQ:KLAC) Simply the Best


Adam Hejl /
2023/01/24 5:29 am EST
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The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the semiconductor manufacturing stocks have fared in Q3, starting with KLA Corporation (NASDAQ:KLAC).

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 4 semiconductor manufacturing stocks we track reported a decent Q3; on average, revenues beat analyst consensus estimates by 2.97%, while on average next quarter revenue guidance was 2.03% above consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but semiconductor manufacturing stocks held their ground better than others, with the share prices up 21.9% since the previous earnings results, on average.

Best Q3: 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 $2.72 billion, up 30.7% year on year, beating analyst expectations by 4.95%. It was a strong quarter for the company, with a beat on the bottom line and very optimistic guidance for the next quarter.

"KLA's September quarter results were at the high-end or above the midpoint of our guidance ranges for revenue, non-GAAP gross margin and GAAP and non-GAAP EPS, exhibiting the consistency we are known for and the unique value KLA delivers to our customers," commented Rick Wallace, president and chief executive officer of KLA Corporation.

KLA Corporation Total Revenue

KLA Corporation scored the strongest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 38.6% since the results and currently trades at $425.5.

Is now the time to buy KLA Corporation? Access our full analysis of the earnings results here, it's free.

Lam Research (NASDAQ:LRCX)

Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.

Lam Research reported revenues of $5.07 billion, up 17.8% year on year, beating analyst expectations by 3.36%. It was a strong quarter for the company, with a beat on the bottom line and very optimistic guidance for the next quarter.

Lam Research Total Revenue

The stock is up 48.6% since the results and currently trades at $491.03.

Is now the time to buy Lam Research? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Marvell Technology (NASDAQ:MRVL)

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 $1.53 billion, up 26.9% year on year, missing analyst expectations by 1.28%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.

Marvell Technology had the weakest performance against analyst estimates in the group. The stock is down 5.94% since the results and currently trades at $42.68.

Read our full analysis of Marvell Technology's results here.

Applied Materials (NASDAQ:AMAT)

Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.

Applied Materials reported revenues of $6.74 billion, up 10.2% year on year, beating analyst expectations by 4.85%. It was a decent quarter for the company, with a beat on the bottom line but slow revenue growth.

Applied Materials had the slowest revenue growth among the peers. The stock is up 8.63% since the results and currently trades at $113.51.

Read our full, actionable report on Applied Materials here, it's free.

The author has no position in any of the stocks mentioned