Shares of KLA Corp. (KLAC) have gained 25.3% over the past 12 months. KLAC provides equipment and services to the electronics industry catering to manufacturers of wafers and reticles, integrated circuits, PCBs, flat panel displays, and packaging.
KLA’s recent second-quarter performance came in ahead of expectations for both its top-line and bottom-line fronts. Due to higher Semiconductor Process Control revenue, total revenue increased 42.5% year-over-year to $2.35 billion, beating expectations by $20 million. Earnings per share at $5.59 beat analysts’ estimates by $0.14.
Notably, the company returned a total of $2 billion to investors in the calendar year 2021 through dividends and stock buybacks.
With these developments in mind, let us take a look at the changes in KLA’s key risk factors that investors should know.
According to the TipRanks Risk Factors tool, KLA’s top risk category is Finance & Corporate, contributing 23% (compared to a sector average of 48%) to the total 35 risks identified. In its recent quarterly report, the company has changed two key risk factors.
Under the Tech & Innovation risk category, KLA noted that it is dependent on secure information technology for its business. Consequently, the company is exposed to cybersecurity threats and cyber incidents. KLA has witnessed cyber-related attacks in the past and may experience them in the future as well. A cyber security event in the future may affect KLA’s business, customers, suppliers. along with systems and networks of other service providers.
Meanwhile, under the Production risk category, KLA highlighted that it has manufacturing operations across the globe, and disruption in its manufacturing or that of its suppliers or customers due to factors such as earthquake, flood, health epidemics, terrorism, or other catastrophic events could potentially mean cancelation of orders, loss of customers, or delays in deliveries for the company.
Hedge Fund Activity
According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in KLA Corp by 154.3 thousand shares in the last quarter, indicating a negative hedge fund confidence signal in the stock based on activities of 8 hedge funds.
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