Kulicke and Soffa Industries KLIC reported fourth-quarter fiscal 2024 non-GAAP earnings of 34 cents per share, which missed the Zacks Consensus Estimate by 5.56%. The bottom line dropped 33.3% year over year.

KLIC’s earnings lagged the Zacks Consensus Estimate in two of the trailing four quarters, beating in the remaining two, the average negative earnings surprise being 117.34%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Revenues declined 10.4% year over year to $181.3 million but surpassed the consensus estimate by 0.73%.

Kulicke and Soffa’s stock has declined 16.6% against the Zacks Computer and Technology sector’s rise of 29.3% in the year-to-date period. Shares were unchanged in after-hours trading following the results.

KLIC’s End-Market Details

In terms of end-market, revenues from General Semiconductor grew 11% sequentially (excluding contributions from the TCB business) to $84 million.

Revenues from the Automotive and Industrial segment rose 42.3% year over year to $37 million.

LED revenues were weak in the reported quarter, achieving only $2 million due to challenges in the traditional wire bonded and high-bright lighting market. Despite the decline, the company remains committed to promoting the adoption of its Luminex system — a laser-based mini-LED placement technology.

The Memory segment has grown significantly year over year to $19 million from $2 million.

The APS segment reached $40 million in the reported quarter, reflecting a 2.4% decline from $41 million in the prior-year period.

Kulicke and Soffa’s Operating Details

In the fourth quarter of fiscal 2024, the gross margin expanded by 100 basis points (bps) year over year to $87.7 million, which was 48.3% of net revenues.

Operating expenses rose 11.3% year over year to $85 million due to 14.1% growth in selling, general and administrative expenses, and a 3% increase in research and development expenses.

Non-GAAP operating income declined 51.7% year over year to $12.7 million, whereas the operating margin contracted by 600 bps to 7%.

KLIC’s Balance Sheet & Cash Flow

As of Sept. 28, 2023, Kulicke and Soffa’s cash, cash equivalents and short-term investments were $577.1 million.

The cash flow from operating activities was $31.6 million compared with $26.9 million in the previous quarter.

The adjusted free cash flow was $29.2 million against the free cash outflow of $24.2 million in the previous quarter.

The company repurchased 1 million shares of its common stock for $42.7 million.

KLIC’s Q1 Guidance

For first-quarter fiscal 2025, net revenues are expected to be $165 million (+/- $10 million).

The company anticipates non-GAAP operating expenses to rise to $70.5 million (+/-2%).

Non-GAAP earnings are anticipated to be 28 cents per share (+/-10%). The Zacks Consensus Estimate is pegged at 37 cents per share, unchanged over the past 30 days.

Zacks Rank & Stocks to Watch

Kulicke & Soffa currently carries a Zacks Rank #3 (Hold).

NVIDIA NVDA, Dell Technologies DELL and Workday WDAY are some better-ranked stocks that investors can consider in the broader sector.

NVIDIA sports a Zacks Rank #1 (Strong Buy), and Dell Technologies and Workday carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA’s shares have jumped 196.3% year to date. NVDA is set to report third-quarter fiscal 2025 results on Nov. 20.

Dell Technologies’ shares have gained 75.8% year to date. DELL is set to report its third-quarter fiscal 2025 results on Nov. 26.

Workday’s shares have lost 1.7% year to date. WDAY is set to report its third-quarter fiscal 2025 results on Nov. 26.

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