KLA(US:KLAC) ZACKS·2025-07-28 16:41Core Insights - KLA Corporation (KLAC) is expected to report its fourth-quarter fiscal 2025 results on July 31, with projected revenues of $3.075 billion, indicating a year-over-year increase of 19.75% [1][10] - The company anticipates non-GAAP earnings of $8.53 per share, reflecting a year-over-year growth of 29.24% [2][10] - KLA has consistently surpassed earnings estimates in the past four quarters, with an average surprise of 5.81% [2] Revenue and Earnings Expectations - The Zacks Consensus Estimate for KLA's revenues is $3.08 billion, which is within the company's guidance range [1] - The expected earnings per share (EPS) of $8.53 is unchanged over the past 30 days, indicating stability in earnings expectations [2] Business Segment Performance - KLA's advanced packaging business is projected to grow significantly, with revenues expected to rise from over $500 million in 2024 to an anticipated $850 million in 2025, driven by increased complexity in chip integration and AI infrastructure [3] - Strong spending on leading-edge logic nodes and high-bandwidth memory technologies supports KLA's position in the wafer fabrication equipment sector [4] Market Drivers - Artificial intelligence (AI) advancements are a key catalyst for KLA, driving demand for advanced semiconductors and process control solutions [5] - The Services division reported $669 million in revenues for the third quarter, marking a 13.3% year-over-year increase, although export restrictions and tariffs may pose challenges [6] Margin and Profitability Concerns - Tariff implementations are expected to compress gross margins by approximately 100 basis points in the upcoming quarter, particularly affecting service operations [7] - KLA's effective tax rate has risen to around 14% due to global tax reforms, which may negatively impact profitability [7] Earnings Outlook - KLA currently has an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy), indicating a neutral outlook for earnings performance [8]