viewKulicke and Soffa Industries Inc.

Kulicke & Soffa shares drop after fourth quarter guidance disappoints



Kulicke & Soffa Industries (NASDAQ:KLIC) announced Tuesday strong growth in its third quarter earnings and revenues, beating Street estimates. 

Still, the designer and manufacturer of semiconductor and LED assembly equipment posted a lower-than-expected fourth quarter outlook, causing its shares to drop.

For the three months ending July 2, Kulicke & Soffa posted a net income of $70.7 million, or $0.95 per share, up 44.1% over $49.1 million, or $0.65 per share, a year ago.

Revenues rose 33% to $294.4 million, from $221.3 million in the same period last year.

Analysts anticipated $0.83 in earnings on $263.48 million in revenues for the third quarter.

Still, Kulicke & Soffa set its fourth quarter revenues forecast at a range of $155 million to $175 million, as OSAT demand softens - far from analysts' $211.22 million estimate, causing its shares to dip 6.9% to $8.63 per share as of 11:55 am EDT.

For the full year, this outlook represents revenue growth between 6% and 8% over fiscal 2010, which would equal a range of $808.6 million to $823.8 million, well below the $830.32 million expectations for the year.

President and CEO, Bruno Guilmart said of the outlook: "We expect to benefit from longer-term trends, including the copper transition, for the next few years."

Still, the company's income from operations rose over 63% to $81.7 million, providing an operating margin of 27.7%, up 510 basis points over the same period last year.

Gross margins rose 70 basis points to 45.5%.

"Our results again exceeded the high-end of guidance, with revenue increasing approximately 42% sequentially and net income surpassing the Company's historic record," Guilmart continued.

"Our flexible and efficient manufacturing model enabled us to increase production and meet our customers' record demand, while balancing inventory and maximizing profitability."

Kulicke & Soffa's equipment business posted revenues of $275.4 million, up 36.2%, as sales from ball bonder equipment rose 70%, more than offsetting the 32% drop in wedge bonder equipment.

Meanwhile, the company's expendable tools business remained relatively flat at $19.04 million.

The Singapore-based company's backlog at the end of the quarter fell to $176 million, from $264 million a year ago.


Quick facts: Kulicke and Soffa Industries Inc.

Price: 31.28 USD

Market: NASDAQ
Market Cap: $1.94 billion

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