KLA-Tencor net falls, cautious on industry

SAN FRANCISCO (Reuters) - Microchip equipment maker KLA-Tencor Corp (KLAC.O) posted a quarterly profit in line with expectations on Thursday, but gave a cautious outlook due to scaled-back spending plans by some chipmakers.

Net income fell to $88.2 million, or 46 cents per share, in its first quarter ended September 30, from $135.9 million, or 67 cents per share, a year ago.

Excluding special items such as a $47 million tax expense, KLA-Tencor's profit was 75 cents, matching the average target, as compiled by Reuters Estimates.

Revenue climbed 10 percent to $693 million from $629.4 million. The result beat the average analyst target of $684 million.

KLA-Tencor, which specializes in tools for testing chips and improving production yields, said some chipmakers had delayed or scaled back their expansion plans, pushing some orders into next year.

For the second quarter, Chief Executive Rick Wallace said on a conference call he expected KLA-Tencor to earn 68 cents to 73 cents per share on revenue of between $625 million and $640 million.

Analysts expected 74 cents per share on $673 million in revenue, according to Reuters Estimates.

"We're fortunate in the guidance we just gave you that we're off to a really fast start. We already have a lot of it booked," Chief Operating Office John Kispert told analysts on the call.

Wallace said capital equipment spending by chipmakers would be "choppy" next year as cautious plans by contract chip manufacturers and logic chip companies offset expected strength in memory chips and an industry transition to chip designs with smaller circuitry.

A contract manufacturer makes chips on behalf of a company that designs them. Logic chips are processors for personal computer and other devices, while memory chips store data in computers.

Shares in KLA-Tencor fell 3 percent to $51 in extended trading after closing down 1.1 percent on Nasdaq. The stock has risen 5.7 percent so far this year, compared to a gain of 4.9 percent in rival Applied Materials Inc (AMAT.O).

(Reporting by Scott Hillis)