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MKS Instruments, Inc. (MKSI - Analyst Report) reported adjusted earnings per share of 14 cents, beating the Zacks Consensus Estimate of 12 cents. However, the year-over-year financial results for the second quarter of 2013 were weak with a drop in both earnings as well as revenues. Earnings dropped 60.0% year over year.


Net sales dropped 11.5% year over year to $156.9 million. Reported revenues, however, beat the Zacks Consensus Estimate of $156.0 million, marginally.

Revenues from the sale of Products came in at $132.5 million and accounted for 84.5% of total revenue, while sales from Services came in at $24.4 million, accounting for the remaining 15.5%.


MKS Instruments’ cost of revenues dropped 5.9% from the year-earlier quarter to $95.0 million in the second quarter. This resulted in a gross margin of 39.5%, declining 360 basis points (bps) year over year. SG&A (selling, general and administrative) expense was $34.8 million, up 7.0% year over year. The company reported operating margins of 6.6%, plunging 940 bps year over year.

Financial Update

Cash and cash equivalents at the end of second-quarter 2013 were $235.7 million, compared with $266.7 million at the end of the preceding quarter.

During the quarter, MKS Instruments paid a quarterly cash dividend of 16 cents per share. The company also repurchased 46K shares worth $1.2 million in the quarter.


Management believes the semiconductor markets will stabilize over the next few quarters. Accordingly, revenues are expected in the range of $155.0 million to $170.0 million in third-quarter 2013. The company also expects to generate earnings per share in the range of 14 cents to 26 cents.

The semiconductor industry is in the process of gaining traction in the coming quarters, after facing a downturn over the past few quarters.

Other Stocks to Consider

Entegris, Inc. (ENTG - Snapshot Report) released its second-quarter results on Jul 23, 2013. The company reported earnings per share of 15 cents, beating the Zacks Consensus Estimate of 11 cents by 36.4%.

Cohu, Inc. (COHU - Snapshot Report) is expected to release its second-quarter results after the market closes on Jul 31, 2013. The Zacks Consensus Estimate for the quarter is a loss of 13 cents.

Brooks Automation, Inc. (BRKS - Snapshot Report) is expected to release its fiscal third-quarter 2013 results after the market closes on Aug 8, 2013. The Zacks Consensus Estimate for the quarter is 3 cents.

MKS Instruments currently carries a Zacks Rank #3 (Hold).

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