Tags: KLAC-Tencor | Special | Dividend | Shares

KLAC-Tencor Unveils Special Dividend; Shares Jump

Thursday, 23 Oct 2014 07:38 PM

KLA-Tencor Corp., a maker of chip-production machinery, surprised investors with a special dividend equal to about 23 percent of the company’s share price, sparking a rally in the stock in extended trading Thursday.

KLA, which also issued a revenue forecast that fell short of analysts’ average estimates for the third straight quarter, intends to pay the $16.50-a-share cash dividend before the end of the year, the company said in a statement. The stock traded as high as $84.51 following the first-quarter earnings announcement, up as much as 19 percent from $71 at the close in New York.

While some of the payout will come from existing cash, part it will be funded with “incremental debt,” KLA said. When deciding on the payout, KLA’s board took into account the company’s ability to carry a higher debt load, generate cash and invest in its business, according to the statement. KLA, which makes machines that check that stages in the production of computer chips have been completed correctly, is struggling to predict when customers will buy equipment, according to Patrick Ho, an analyst at Stifel Nicolaus & Co.

“This is a trend for all equipment suppliers -- lead times are getting much shorter and customers will hold off ordering and taking tools until absolutely necessary,” said Ho, who has a hold rating on KLA’s stock.

KLA said revenue in the current period, which ends in December, will be $620 million to $700 million. That compares with an average estimate of $752.9 million, according to data compiled by Bloomberg.

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KLA-Tencor Corp., a maker of chip-production machinery, surprised investors with a special dividend equal to about 23 percent of the company's share price, sparking a rally in the stock in extended trading Thursday.
KLAC-Tencor, Special, Dividend, Shares
255
2014-38-23
Thursday, 23 Oct 2014 07:38 PM
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