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KLA-Tencor tops estimates

KLA-Tencor Corp. said Thursday that revenue for its first fiscal quarter was $535 million, a 96 percent increase from the $273 million of the September, 1999 quarter and up 11 percent over the previous quarter. The company also topped earnings estimates.

Net income improved almost three-fold to $106 million, or 54 cents a share, compared to $36 million, or 19 cents a share, excluding the impact of non-recurring acquisition, restructuring and other charges in the same period one year ago. First Call was expecting a profit of 51 cents a share.

Shares in the chip-equipment maker were up 1.87 to 37.50 on the Island ECN before market open Thursday. Shares rose over recent days in anticipation of earnings from AMD (NYSE: AMD), which wowed investors with last night's stronger-than-expected report.

Ken Schroeder, KLA-Tencor's president and chief executive officer, said, "The strong demand across our entire product line contributed to our current quarter's positive financial results."

The company said it ended the quarter with over 6 months backlog at current shipping levels, due to the continued healthy book to bill ratio. Geographically, the strongest performance came from Japan and Singapore.

Bookings remained strong in all product areas, with record bookings for overlay metrology, macro inspection and optical review products. Both reticle inspection and wafer inspection products had significant order interest in the new product platforms.

Gross margins increased to 57.3 percent during the September quarter from 57.1 percent in the June quarter. Total fixed costs as a percent of revenue decreased from 33 percent in the June quarter to 32.1 percent, or $172 million, in the September quarter. The company increased spending on engineering programs during the quarter to $81 million, compared with $76 million in the June quarter, to support advanced e-beam and optical wafer inspection programs.

Cash and investments decreased slightly during the quarter to $935 million due to share repurchases, investments in land and buildings, and increased inventory.