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KLA-Tencor beats 4Q estimates

KLA-Tencor Corporation (Nasdaq: KLAC) posted fourth quarter earnings of $26 million, or 28 cents a share Wednesday, beating First Call's expectation of 26 cents a share.

The company, which makes software for yield management in the semiconductor industry, said increasing product demand accounted for the upside surprise. Shares were up 3/8 to 66 Wednesday morning, below their 52-week high of 73 1/16.

Revenue for the quarter was $234 million, compared with revenues of $253 million. Earnings compare with a net income of $23 million, or 26 cents a share in the same period last year.

New order growth was strong and backlog increased across all product lines, the company said. Significant growth occurred in the Film Measurement and E-Beam Wafer Inspection areas. Geographically, Taiwan had the biggest increase in order volume and new orders from Japan also increased.

A shift toward newer products with higher margins and trimmer manufacturing drove up gross margins 1 percent over the previous quarter. Cash and investments in the debt-free company increased to $755 million during the quarter.

Shares in KLA-Tencorsurged last June after chip-equipment stocks were upgraded and demand for semiconductors made a comeback. Eleven out of 19 analysts covering the stock rate it a "moderate buy" according to Zack's Investment Research.