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Advanced Energy (AEIS) Down 1.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Advanced Energy Industries (AEIS - Free Report) . Shares have lost about 1.9% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Advanced Energy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Advanced Energy Beats on Q4 Earnings & Revenues
Advanced Energy Industries reported fourth-quarter 2021 non-GAAP earnings of $1.36 per share, beating the Zacks Consensus Estimate by 41.7%. Further, the bottom line improved 52.8% from the prior quarter but decreased 8.7% from the year-ago quarter.
Revenues of $396.9 million surpassed the Zacks Consensus Estimate of $360 million. The top line improved 7% from the year-ago quarter and 14.7% from the previous quarter.
Top-line growth was driven by strong momentum across semiconductor equipment, data center computing, and industrial and medical end markets.
However, the coronavirus-induced supply-chain constraints acted as headwinds. Further, softness in the telecom and networking markets was another concern.
End Market in Detail
Semiconductor Equipment: Revenues generated from this market grew 8.2% year over year to $179.3 million (45.2% of total revenues), driven by strong fab investments that led to a robust demand environment.
Industrial & Medical: Revenues from this market grew 5.3% year over year to $98.8 million (24.9% of revenues) in the reported quarter. Top-line growth in this market was driven by growing customer demand. Also, impressive design wins in medical, horticulture and solar cell manufacturing remained positives.
Data Center Computing: Revenues from the market were $80.1 million (20.2% of revenues), up 22.6% from the year-ago quarter. This was attributed to improved parts availability.
Telecom & Networking: Revenues generated from this market were $38.7 million (9.7% of revenues), down 16% from the prior-year quarter due to portfolio optimization actions.
Nevertheless, strong investments in 5G infrastructure, which led to growth in the company’s shipments, remained a tailwind. Also, the company’s continuous design wins were positives.
Operating Results
In the fourth quarter, non-GAAP gross profit margin was 35.5%, which contracted 400 basis points (bps) from the year-ago quarter.
Non-GAAP operating expenses were $86.1 million, up 11.9% year over year. As a percentage of revenues, the figure expanded 100 bps year over year to 21.7% in the reported quarter.
Non-GAAP operating margin was 13.8%, contracting 490 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash, cash equivalents and marketable securities were $546.7 million compared with $550.8 million on Sep 30, 2021.
Total debt was $392.7 million at fourth-quarter end, down from $397.6 million at third-quarter end.
For the fourth quarter, cash flow from operations was $34.5 million compared with $18.3 million in the third quarter.
The company made dividend payments of $3.8 million and repurchased shares worth $21.5 million in the quarter.
Guidance
For first-quarter 2022, Advanced Energy expects non-GAAP earnings of 94 cents per share (+/- 25 cents).
Further, the company anticipates revenues of $360 million (+/- $20 million).
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Advanced Energy has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Advanced Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Advanced Energy (AEIS) Down 1.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Advanced Energy Industries (AEIS - Free Report) . Shares have lost about 1.9% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Advanced Energy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Advanced Energy Beats on Q4 Earnings & Revenues
Advanced Energy Industries reported fourth-quarter 2021 non-GAAP earnings of $1.36 per share, beating the Zacks Consensus Estimate by 41.7%. Further, the bottom line improved 52.8% from the prior quarter but decreased 8.7% from the year-ago quarter.
Revenues of $396.9 million surpassed the Zacks Consensus Estimate of $360 million. The top line improved 7% from the year-ago quarter and 14.7% from the previous quarter.
Top-line growth was driven by strong momentum across semiconductor equipment, data center computing, and industrial and medical end markets.
However, the coronavirus-induced supply-chain constraints acted as headwinds. Further, softness in the telecom and networking markets was another concern.
End Market in Detail
Semiconductor Equipment: Revenues generated from this market grew 8.2% year over year to $179.3 million (45.2% of total revenues), driven by strong fab investments that led to a robust demand environment.
Industrial & Medical: Revenues from this market grew 5.3% year over year to $98.8 million (24.9% of revenues) in the reported quarter. Top-line growth in this market was driven by growing customer demand. Also, impressive design wins in medical, horticulture and solar cell manufacturing remained positives.
Data Center Computing: Revenues from the market were $80.1 million (20.2% of revenues), up 22.6% from the year-ago quarter. This was attributed to improved parts availability.
Telecom & Networking: Revenues generated from this market were $38.7 million (9.7% of revenues), down 16% from the prior-year quarter due to portfolio optimization actions.
Nevertheless, strong investments in 5G infrastructure, which led to growth in the company’s shipments, remained a tailwind. Also, the company’s continuous design wins were positives.
Operating Results
In the fourth quarter, non-GAAP gross profit margin was 35.5%, which contracted 400 basis points (bps) from the year-ago quarter.
Non-GAAP operating expenses were $86.1 million, up 11.9% year over year. As a percentage of revenues, the figure expanded 100 bps year over year to 21.7% in the reported quarter.
Non-GAAP operating margin was 13.8%, contracting 490 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash, cash equivalents and marketable securities were $546.7 million compared with $550.8 million on Sep 30, 2021.
Total debt was $392.7 million at fourth-quarter end, down from $397.6 million at third-quarter end.
For the fourth quarter, cash flow from operations was $34.5 million compared with $18.3 million in the third quarter.
The company made dividend payments of $3.8 million and repurchased shares worth $21.5 million in the quarter.
Guidance
For first-quarter 2022, Advanced Energy expects non-GAAP earnings of 94 cents per share (+/- 25 cents).
Further, the company anticipates revenues of $360 million (+/- $20 million).
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Advanced Energy has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Advanced Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.