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What: Shares of Kulicke & Soffa Industries (NASDAQ:KLIC), a manufacturer of semiconductor equipment and tools, slumped on Tuesday after the company reported mixed second-quarter earnings. At 1 p.m. Tuesday, the stock was down about 10%.

So what: Kulicke & Soffa reported quarterly revenue of $145.2 million, up 27.2% year-over-year and about $5 million higher than analyst estimates. This revenue beat, however, wasn't enough to overcome an earnings miss. The company reported EPS of $0.10, down 16.7% year-over-year and two cents short of what analysts were expecting.

Gross margin fell 330 basis points year-over-year, declining to 47.2%. Operating margin also fell, down 220 basis points year-over-year to 6.8%. Operating margin has been declining for the past few years, peaking in fiscal 2012 at 22.7%.

CEO Bruno Guilmart explained the results: "We performed well this quarter, generating revenue slightly above the high-end of our guided range. Our financial results, during a quarter of significant ongoing investments in product development, are supported by our large install base and overall exposure to higher-growth opportunities within end markets such as memory, mobility, connectivity devices and sensors."

Now what: The semiconductor equipment business is a volatile one, making it difficult to predict earnings very far into the future. Revenue actually grew faster than operating expenses during the quarter, but a lower gross margin combined with a higher tax rate compared to the second quarter of 2014 led both operating income and net income to decline year-over-year.

The stock was punished severely for what appears to be a decent quarter. Weak guidance may be a reason why the stock declined, with the company guiding for third-quarter revenue between $160 million and $170 million. This would represent a decline compared the third quarter of 2014, when the company reported $181 million of revenue.

Kulicke & Soffa operates in a tough industry, and quarterly results are almost guaranteed to be extremely volatile. Investors considering the stock should look at the long-term performance and the long-term prospects of the company instead of the results of a single quarter.