(Adds comment from CEO, background)
By Noel Randewich
SAN FRANCISCO, July 8 (Reuters) - Chip gear maker KLA-Tencor Corp said on Tuesday its bookings in the fiscal fourth quarter were close to $895 million or $900 million, higher than expected and helped by demand from contract chip manufacturers.
KLA-Tencor said at an event with investors that in the quarter, which ended in June, contract manufacturers, known as foundries, accounted for two-thirds of its business.
While bookings topped expectations, Chief Executive Rick Wallace struck a cautious tone about demand, which tends to be lumpy due to a dwindling number of major customers.
“This is a quarter where we believe we’re in a bit of a pause right now in the industry,” Wallace told analysts. “Bookings that we got, while strong, were really for foundry, and more for delivery and revenues that we’ll see in calendar ‘15.”
The company will provide its full quarterly report later in July. In April, KLA-Tencor said that it expected bookings in the June quarter in a range between $625 million to $825 million.
KLA-Tencor’s products are used by chipmakers to measure the effectiveness of complicated manufacturing processes and reduce defects.
Chip makers like Taiwan Semiconductor Manufacturing Co Ltd , Intel and Samsung Electronics are using new manufacturing technology that produces more efficient chips but they are also wrestling with a cooling smartphone market and uncertainty about future demand for their components.
Samsung on Tuesday issued unexpectedly weak quarterly earnings guidance, putting it on track for its worst results in two years.
Top chip maker Intel is also struggling with slow demand for personal computers.
Earlier on Tuesday, KLA-Tencor announced an 11 percent increase in its quarterly dividend and a $1 billion share repurchase authorization.
Shares of KLA-Tencor closed up 0.09 percent at $74.09. Before news of the company’s quarterly bookings its stock had traded around $73.60. (Reporting by Noel Randewich; Editing by Jonathan Oatis)