http://www.morningstar.com/earnings/51386151-klatencor-corp-klac-q3-2013.aspx

KLA-Tencor Corp KLAC
Q3 2013 Earnings Call Transcript

Transcript Call Date 04/25/2013

Operator: Good afternoon. My name is Jay, and I will be your conference operator today. At this time, I would like to welcome everyone to the KLA-Tencor Third Quarter Fiscal Year 2013 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

I'd now like to hand the call over to Ed Lockwood, Senior Director of Investor Relations. Please go ahead, sir.

Ed Lockwood - Senior Director, IR: Thank you, Jay. Good afternoon, everyone, and welcome to our conference call. Joining me on our call today are Rick Wallace, our President and Chief Executive Officer; and Mark Dentinger, our Chief Financial Officer.

We're here to discuss third quarter results for the period ended March 31, 2013. We released these results this afternoon at 1.15 PM Pacific Time. If you haven't seen the release, you can find it on our website at www.kla-tencor.com, or call 408-875-3600 to request a copy. A simulcast of this call will be accessible on demand following its completion on the Investor Relations section of our website. There you'll also find a calendar of future investor events, presentations and conferences, as well as links to KLA-Tencor's SEC filings, including our Annual Report on Form 10-K for the year ended June 30, 2012 and our subsequently filed 10-Q reports. In those filings, you'll find descriptions of risk factors that could impact our future results.

As you know, our future results are subject to risks. Any forward-looking statements, including those we make on this call today, are subject to those risks and KLA-Tencor cannot guarantee those forward-looking statements will come true. Our actual results may differ significantly from those projected in our forward-looking results. More information regarding factors that could cause those differences is contained in the filings we make with the SEC from time-to-time, including our fiscal 2012 Form 10-K and our current reports on Form 8-K. We assume no obligation and do not intend to update those forward-looking statements. However, any updates we do provide will be broadly disseminated and available over the web.

With that, I'll turn the call over to Rick.

Rick Wallace - President and CEO: Thanks, Ed. Thank you all for joining us on our call today. The March quarter results for KLA-Tencor were in line with the Company's expectations. New bookings in the March quarter were $738 million, down about 3% compared with December. Orders were concentrated among our foundry and logic customers with particular strength from logic customers in the period. Third quarter revenue was $729 million and non-GAAP EPS was $1.01 per share, applying an effective tax rate of 14%, resulting from a one-time R&D tax credit taken in the quarter. Non-GAAP earnings would have been $0.89 at our modeled tax rate of 24%.

So, a good start for KLA-Tencor in calendar year 2013, following the year a very strong relative performance for the Company in calendar 2012. In fact, according to Gartner's recently published industry report, KLA-Tencor sustained its strong relative market position in calendar 2012, in an environment in which overall process control market revenues were flat in 2012 and the industry CapEx was down approximately 10%. These results highlight a continuation of the trend we've seen in this cycle of increasing adoption of process control, as the mobility markets fuel growth in foundry and logic demand and the increasing cost and complexity associated with managing yields makes process control critical to our customers' success at the leading-edge.

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