UPDATE 2-KLA-Tencor forecasts strong 3rd-quarter results
* Second-quarter revenue $673 million vs estimated $633.8 million
* Earnings/share $0.63 vs. estimated $0.56
* Expects third-quarter revenue $690-$750 million
* Expects third-quarter earnings $0.76-$0.96/share
* Shares up 4 percent, after-market
By Himank Sharma
Jan 24 (Reuters) - Chip equipment maker KLA-Tencor Corp gave a strong outlook after its second-quarter results convincingly beat analysts' estimates on sustained demand from semiconductor companies.
Shares of the company, whose products help measure the effectiveness of complicated manufacturing processes and reduce defects essential for chipmakers implementing challenging new technologies, rose 4 percent in extended trading after closing at $51.97 on the Nasdaq on Thursday.
Booming sales of smartphones and tablets have fueled the capital spending by chipmakers boosting orders for equipment used in semiconductor assembly.
The company said it expects a profit of between 76 and 96 cents per share on revenue of between $690 million and $750 million in the third quarter.
Analysts were expecting a 81 cents per share profit on $708.9 million in revenue, according to Thomson Reuters I/B/E/S.
"Definitely seems like they've benefited from TSMC's capex spend. And when you look at Intel and some of the other foundries, they stand to book some more orders there," Morningstar analyst Andy NG said.
KLA Tencor said it expects $690 million to $750 million in bookings, up from between $550 million and $750 million it projected for the second quarter.
Top chipmaker Intel Corp said last week that its annual capital spending would increase to $13 billion from $11 billion. Much of that spending will go toward cutting-edge production lines due to ramp up next year.
Leading contract chipmaker TSMC said last month that it will boost its annual capital spending to a record $9 billion from $8.3 billion.
KLA Tencor's net income fell to $107 million, or 63 cents per share, from $122 million, or 72 cents per share, a year earlier, hurt by higher costs. Revenue rose to $673 million from $642 million.
Analysts on average were expecting a profit of 56 cents per share on $633.8 million in revenue, according to Thomson Reuters I/B/E/S.