(AP) — Fitch Ratings upgraded its outlook for KLA-Tencor Corp. on Friday, citing the company's improving sales.

KLA-Tencor, which is based in Milpitas, Calif., makes equipment for chip manufacturers. Fitch raised the company's outlook to "Stable" from "Negative." It also affirmed its issuer default and unsecured debt ratings, which both stand at "BBB."

KLA-Tencor's revenue climbed 11 percent year-over-year to $440.4 million in its second fiscal quarter, which ended in December. It made a profit of $21.8 million, reversing a loss from the year before.

Fitch said it expects sales growth of 20 percent to 30 percent in 2010 as chip makers increase their capital spending. Profit margins should improve also as the company works closer to manufacturing capacity and sees the benefits of cost-cutting from last year, Fitch said.

The company's stock was trading up 22 cents at $29.70 Friday afternoon.

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