Why Kulicke & Soffa Shares Tanked

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of semiconductor equipment maker Kulicke & Soffa (NASDAQ: KLIC  ) fell as much as 12% after the company reported its first-quarter earnings results.

So what: For the quarter, Kulicke & Soffa reported a 5% decline in revenue to $114 million and an adjusted profit of $0.07, excluding one-time items. Both figures were modestly ahead of the $107.2 million in revenue and $0.06 that Wall Street had been expecting. The wheels fell off the bus, however, when the company offered revenue guidance for the second-quarter to the tune of $90 million to $100 million, well below the $127 million the Street expected. Kulicke's management noted that this is typically their slow time of the year and visibility should improve after the Chinese New Year.

Now what: While everyone else is choosing to run away, I'd choose this moment to get excited. Kulicke & Soffa is in a cyclical industry, and with cyclical industries comes the normal ebb-and-flow of the tech cycle. Although the company's guidance may not be indicative of it, Intel's capital expenditures forecast of $13 billion this year, which was $2 billion higher than in 2012, could be the signal of higher spending that management was waiting for. Kulicke & Soffa regularly produces positive free cash flow and $494.2 million in cash ($6.45 per share) with no debt. If anything, I'd use a day like today to dig deeper into Kulicke & Soffa.

Craving more input? Start by adding Kulicke & Soffa to your free and personalized Watchlist so you can keep up on the latest news with the company.

All eyes on Intel
When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you'll continue to receive updates for an entire year. Click here now to learn more.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2222472, ~/Articles/ArticleHandler.aspx, 9/22/2014 4:33:39 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 17,279.74 13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASD 4,579.79 -13.64 -0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/19/2014 3:59 PM
KLIC $14.69 Up +0.07 +0.48%
Kulicke and Soffa… CAPS Rating: *****

Advertisement