Lower capital spending by semiconductor makers everywhere depressed revenue and earnings of KLA-Tencor, as the equipment maker reported Monday fourth quarter revenue of $253 million, a decline of 8 percent from revenue of $276 million in the same period last year.
Net income was $23 million, and earnings per share were 26 cents, excluding certain nonrecurring acquisition costs of approximately $19 million, or 22 cents per share. That compared with net income of $42 million and earnings per share of 48 cents for the same 1997 period. During the fourth quarter of 1998, KLA-Tencor acquired Amray, VARS, and DeviceWare, and wrote off in-process R&D costs primarily associated with the acquisition of VARS.
New orders were down in all the San Jose, Calif., company's segments. The Wafer Inspection Group was affected most, even though existing fabs continued to upgrade their monitoring capabilities by adding units. New fab construction accounted for less than 30 percent of the new business in the Wafer Group.
The Metrology Group was less affected because of gains in market share and the relative strength of the data-storage market; the Reticle and Photomask division and the Yield Management Group were least affected by the slowdown as new orders continued to be driven by technology changes and new product capabilities rather than new capacity requirements.
The U.S. region was the strongest, with more than 40 percent of total new orders representing relatively higher spending on logic and microprocessor fabs. The Japan region continued to be weaker than normal, and the Asia-Pacific region was also below its normal 30 percent mix. The European region was slightly above the normal levels and contributed about 13 percent of the total.