Investing.com -- KLA Corporation (NASDAQ: KLAC) reported third quarter results that exceeded analyst expectations, but shares fell 7.2% as investors focused on concerns beyond the headline numbers.

The semiconductor equipment maker posted adjusted earnings per share of $9.40 for the third quarter ended March 31, beating the analyst consensus of $9.15 by $0.25. Revenue reached $3.42 billion, surpassing the $3.36 billion estimate and representing an 11.5% increase from $3.06 billion in the same quarter last year. The company reported GAAP diluted EPS of $9.12 on the strong revenue performance.

For the fourth quarter, KLA issued guidance calling for adjusted EPS of $9.87, plus or minus $1.00, compared to the analyst consensus of $9.83. The midpoint of $9.87 sits slightly above expectations. The company projected revenue of $3.575 billion, plus or minus $200 million, with the midpoint of $3.575 billion exceeding the consensus estimate of $3.545 billion.

"KLA delivered strong March quarter results exceeding the midpoint of our guidance ranges on both revenue and earnings per share," said Rick Wallace, president and CEO of KLA Corporation. "Our business momentum remains robust, and we are highly confident in our outlook for calendar year 2026."

The company generated $707.5 million in operating cash flow during the quarter and $622.3 million in free cash flow versus $990M in the year ago perod. For the last twelve months, operating cash flow totaled $4.40 billion and free cash flow reached $4.01 billion.

KLA’s Board of Directors approved a dividend increase to $2.30 per share beginning with the dividend expected to be declared in May 2026, marking the company’s 17th consecutive annual dividend increase. The board also authorized an additional $7 billion for share repurchases.