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Factors Setting the Tone for Axcelis' (ACLS) Q3 Earnings

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Axcelis Technologies, Inc. (ACLS - Free Report) is slated to report third-quarter 2020 results on Nov 5.

The company anticipates third-quarter non-GAAP earnings of 24 cents per share.

The Zacks Consensus Estimate for earnings per share has been steady at 24 cents in the past 30 days. In the third quarter of 2019, Axcelis reported non GAAP earnings of 2 cents per share.

Axcelis Technologies, Inc. Price and EPS Surprise

 

Axcelis Technologies, Inc. Price and EPS Surprise

Axcelis Technologies, Inc. price-eps-surprise | Axcelis Technologies, Inc. Quote

Axcelis expects third-quarter 2020 revenues of $110 million. The Zacks Consensus Estimate for revenues is pegged at $110 million, which indicates an improvement of 58.3% from the year-ago quarter’s reported figure.

Notably, the company has a trailing four-quarter earnings surprise of 110.3%, on average.

Q2 at a Glance

In second-quarter 2020, the company delivered revenues of $123 million. The metric increased 65.5% from the year-ago quarter’s reported figure and 3.3% sequentially.

Earnings during the quarter were 39 cents per share compared with 2 cents per share reported in the year-ago quarter and earnings per share of 33 cents reported in the previous quarter.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Axcelis’ third-quarter performance is expected to reflect continued strength in the semiconductor industry amid the COVID-19 crisis. Axcelis is a well-known name in ion implant systems market, which serves the semiconductor industry.

Improved demand for semiconductor products owing to higher demand from data center operations and increasing demand for PCs and notebooks due to the coronavirus-induced remote working and learning trends and higher gaming activities. This is likely to have contributed to Axcelis’ top line in the third quarter.

In second-quarter earnings conference, management noted that it expects a steady demand for its Purion line of products including the latest product namely including Purion Dragon, which is used for advanced logic and memory applications.

It also expects high demand for Purion XE silicon carbide and the Purion XEmax from customers in the high energy market.

In this regard, it is also important to note that, during the third quarter, management shipped several evaluation systems for the Purion H (next generation) to advanced logic and 3D NAND memory device manufacturers in Asia Pacific.

These factors are likely to have had a positive impact on the company’s third-quarter sales numbers.

Moreover, the company’s strong presence in the foundry logic market in China and Korea is likely to have driven Axcelis’ third-quarter performance. In the second quarter conference call, management noted that it continues to expect shipments to China to remain strong in the third quarter of 2020.

Axcelis also anticipates revenues from the Customer Support and Innovation (CS&I) segment to stay healthy in the third quarter of 2020 as demand for spares and consumables is likely to be driven by increasing fab utilization by customers.

However, continued supply-chain disruptions and other challenges in the logistics space due to coronavirus outbreak may have hindered growth. Also, management is cautious about some of the existing clients as they struggle with the recession and might curb their spending plans.

Further, increasing expenses associated with product development along with COVID-19 crisis is likely to have been a drag on profitability in the third quarter. Notably, the company has suspended share repurchase amid the pandemic to retain liquidity.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Axcelis this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Axcelis has an Earnings ESP of 0.00% and a Zacks Rank #3, making surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Sunoco LP (SUN - Free Report) has an Earnings ESP of +1.00% and sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hologic, Inc. (HOLX - Free Report) has an Earnings ESP of +20.90% and carries a Zacks Rank of 2, currently.

Marchex, Inc. (MCHX - Free Report) has an Earnings ESP of +16.67% and currently carries a Zacks Rank of 2.

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