FormFactor Inc. (FORM - Free Report) reported first-quarter adjusted earnings of 33 cents per share, beating the Zacks Consensus Estimate of 21 cents. The figure decreased 19.5% sequentially but increased 65% year over year.
Revenues increased 21.6% from the year-ago quarter but decreased 10% sequentially to $160.8 million. The top line outpaced the Zacks Consensus Estimate by 14.7%.
The top line was driven by strong demand for both Foundry & Logic probe cards. Customer node transitions and new design releases also aided revenues.
Management continues to expect strong demand for Foundry & Logic probe cards in the near term. Though the company saw a sequential reduction in DRAM probe card demand in the first quarter, it expects long-term DRAM probe card demand to likely remain solid.
FormFactor Inc Price, Consensus and EPS Surprise
Quarter Details
Probe card segment revenues were $135 million in the first quarter, down 12% from the fourth quarter.
Within the probe card segment, Foundry & Logic sales (accounting for 66% of its total revenues) increased 1% on a sequential basis to $106 million.
Revenues for DRAM products (15% of revenues) were $25 million, down $18 million from the fourth quarter.
Flash revenues were $4.3 million, down on a sequential basis.
Systems revenues in the first quarter were $26 million, up 2% sequentially.
Operating Details
On a non-GAAP basis, gross margin expanded 40 basis points (bps) year over year and 200 bps sequentially to 46.1%. The increase was mainly due to higher gross margin in the Systems segment.
Non-GAAP operating expenses were $42.7 million in the first quarter, up from $38.1 million in the prior-year period. The increase was due to higher R&D investments.
Balance Sheet & Cash Flow
At the end of the first quarter, cash and cash equivalents, as well as marketable securities were $239.4 million compared with $220.9 million in the fourth quarter.
Cash flow from operations was $39.3 million in the first quarter versus $37.7 million in the fourth quarter. Free cash flow was $27.6 million, down from $31.6 million in the fourth quarter.
Guidance
FormFactor did not provide any guidance for the second quarter due to risks and uncertainties related to the COVID-19 crisis.
Zacks Rank & Stocks to Consider
Currently, FormFactor carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Akamai Technologies, Inc. (AKAM - Free Report) , Inuvo, Inc. (INUV - Free Report) and Shopify Inc. (SHOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Akamai, Inuvo, and Shopify is currently projected at 12.3%, 30% and 25.8%, respectively.
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FormFactor Inc. (FORM - Free Report) reported first-quarter adjusted earnings of 33 cents per share, beating the Zacks Consensus Estimate of 21 cents. The figure decreased 19.5% sequentially but increased 65% year over year.
Revenues increased 21.6% from the year-ago quarter but decreased 10% sequentially to $160.8 million. The top line outpaced the Zacks Consensus Estimate by 14.7%.
The top line was driven by strong demand for both Foundry & Logic probe cards. Customer node transitions and new design releases also aided revenues.
Management continues to expect strong demand for Foundry & Logic probe cards in the near term. Though the company saw a sequential reduction in DRAM probe card demand in the first quarter, it expects long-term DRAM probe card demand to likely remain solid.
FormFactor Inc Price, Consensus and EPS Surprise
Quarter Details
Probe card segment revenues were $135 million in the first quarter, down 12% from the fourth quarter.
Within the probe card segment, Foundry & Logic sales (accounting for 66% of its total revenues) increased 1% on a sequential basis to $106 million.
Revenues for DRAM products (15% of revenues) were $25 million, down $18 million from the fourth quarter.
Flash revenues were $4.3 million, down on a sequential basis.
Systems revenues in the first quarter were $26 million, up 2% sequentially.
Operating Details
On a non-GAAP basis, gross margin expanded 40 basis points (bps) year over year and 200 bps sequentially to 46.1%. The increase was mainly due to higher gross margin in the Systems segment.
Non-GAAP operating expenses were $42.7 million in the first quarter, up from $38.1 million in the prior-year period. The increase was due to higher R&D investments.
Balance Sheet & Cash Flow
At the end of the first quarter, cash and cash equivalents, as well as marketable securities were $239.4 million compared with $220.9 million in the fourth quarter.
Cash flow from operations was $39.3 million in the first quarter versus $37.7 million in the fourth quarter. Free cash flow was $27.6 million, down from $31.6 million in the fourth quarter.
Guidance
FormFactor did not provide any guidance for the second quarter due to risks and uncertainties related to the COVID-19 crisis.
Zacks Rank & Stocks to Consider
Currently, FormFactor carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Akamai Technologies, Inc. (AKAM - Free Report) , Inuvo, Inc. (INUV - Free Report) and Shopify Inc. (SHOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Akamai, Inuvo, and Shopify is currently projected at 12.3%, 30% and 25.8%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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