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MKS Instruments (MKSI - Free Report) reported first-quarter 2019 adjusted earnings of $1.12 per share that beat the Zacks Consensus Estimate by a nickel.
However, earnings declined 45.9% year over year and 27.3% sequentially.
Revenues of $463.6 million also beat the Zacks Consensus Estimate of $461 million.
However, the top line declined 16.4% year over year, primarily due to lower spending in the semiconductor market. Sequentially, revenues increased 0.7%.
Quarter Details
Products revenues (85.7% of total revenues) were $397.4 million, down 20% from the year-ago quarter and 1.2% sequentially.
Services revenues (14.3%) increased 14.9% year over year and 13.6% quarter over quarter to $66.2 million.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
Sales to semiconductor customers decreased 10% sequentially to $221 million.
Sales to Advanced Markets were $243 million, up 8% sequentially, driven by strong contribution from Electro Scientific Industries, the acquisition of which was closed during the first quarter.
MKS Instruments’ non-GAAP gross margin for the quarter was 43.8%, down 360 basis points (bps) year over year and 170 bps sequentially.
Adjusted EBITDA declined 37.2% from the year-ago quarter and 15.7% sequentially to $103.6 million. Adjusted EBITDA margin contracted 740 bps on a year-over-year basis and 430 bps on a sequential basis to 22.4%.
Research & development (R&D), and sales, general & administrative (SG&A) expenses as percentage of revenues increased 210 bps and 280 bps year over year to 8.4% and 17.8%, respectively.
Sequentially, R&D and SG&A expenses as percentage of revenues increased 140 bps and 300 bps.
While acquisition and Integration costs were $30.2 million, restructuring costs were $0.2 million in the reported quarter.
MKS Instruments’ reported non-GAAP operating income of $81.9 million, down 43.6% from the year-ago quarter and 25.1% sequentially. Adjusted operating margin was 17.7%, which contracted 850 bps on a year-over-year basis and 610 bps sequentially.
Balance Sheet & Cash Flow
MKS Instruments exited the quarter with cash and cash equivalents of $418 million compared with $644.3 million as of Dec 31, 2018.
Long-term debt was $976.8 million compared with $343.8 million as of Dec 31, 2018.
Cash from operating activities was $29.1 million compared with $135.5 million in fourth-quarter 2018 and $72.8 million in the year-ago quarter.
Guidance for Q2
MKS Instruments anticipates to report revenues between $460 million and $510 million. Non-GAAP earnings are expected to range between 89 cents and $1.26 per share.
Moreover, the company targets to realize $15 million of annualized cost synergies from Electro Scientific Industries acquisition over the next 18-36 months.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Ceridian HCM Holding , Upland Software (UPLD - Free Report) and Fortinet (FTNT - Free Report) . While Ceridian HCM Holding and Upland Software sport a Zacks Rank #1 (Strong Buy), Fortinet carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
While Ceridian HCM Holding is set to report quarterly results on May 1, Upland Software and Fortinet are scheduled to report on May 2.
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See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”
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MKS Instruments (MKSI) Q1 Earnings & Revenues Beat Estimates
MKS Instruments (MKSI - Free Report) reported first-quarter 2019 adjusted earnings of $1.12 per share that beat the Zacks Consensus Estimate by a nickel.
However, earnings declined 45.9% year over year and 27.3% sequentially.
Revenues of $463.6 million also beat the Zacks Consensus Estimate of $461 million.
However, the top line declined 16.4% year over year, primarily due to lower spending in the semiconductor market. Sequentially, revenues increased 0.7%.
Quarter Details
Products revenues (85.7% of total revenues) were $397.4 million, down 20% from the year-ago quarter and 1.2% sequentially.
Services revenues (14.3%) increased 14.9% year over year and 13.6% quarter over quarter to $66.2 million.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
MKS Instruments, Inc. Price, Consensus and EPS Surprise | MKS Instruments, Inc. Quote
Sales to semiconductor customers decreased 10% sequentially to $221 million.
Sales to Advanced Markets were $243 million, up 8% sequentially, driven by strong contribution from Electro Scientific Industries, the acquisition of which was closed during the first quarter.
MKS Instruments’ non-GAAP gross margin for the quarter was 43.8%, down 360 basis points (bps) year over year and 170 bps sequentially.
Adjusted EBITDA declined 37.2% from the year-ago quarter and 15.7% sequentially to $103.6 million. Adjusted EBITDA margin contracted 740 bps on a year-over-year basis and 430 bps on a sequential basis to 22.4%.
Research & development (R&D), and sales, general & administrative (SG&A) expenses as percentage of revenues increased 210 bps and 280 bps year over year to 8.4% and 17.8%, respectively.
Sequentially, R&D and SG&A expenses as percentage of revenues increased 140 bps and 300 bps.
While acquisition and Integration costs were $30.2 million, restructuring costs were $0.2 million in the reported quarter.
MKS Instruments’ reported non-GAAP operating income of $81.9 million, down 43.6% from the year-ago quarter and 25.1% sequentially. Adjusted operating margin was 17.7%, which contracted 850 bps on a year-over-year basis and 610 bps sequentially.
Balance Sheet & Cash Flow
MKS Instruments exited the quarter with cash and cash equivalents of $418 million compared with $644.3 million as of Dec 31, 2018.
Long-term debt was $976.8 million compared with $343.8 million as of Dec 31, 2018.
Cash from operating activities was $29.1 million compared with $135.5 million in fourth-quarter 2018 and $72.8 million in the year-ago quarter.
Guidance for Q2
MKS Instruments anticipates to report revenues between $460 million and $510 million. Non-GAAP earnings are expected to range between 89 cents and $1.26 per share.
Moreover, the company targets to realize $15 million of annualized cost synergies from Electro Scientific Industries acquisition over the next 18-36 months.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Ceridian HCM Holding , Upland Software (UPLD - Free Report) and Fortinet (FTNT - Free Report) . While Ceridian HCM Holding and Upland Software sport a Zacks Rank #1 (Strong Buy), Fortinet carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
While Ceridian HCM Holding is set to report quarterly results on May 1, Upland Software and Fortinet are scheduled to report on May 2.
Is Your Investment Advisor Fumbling Your Financial Future?
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”
Click to get it free >>