Back to top

Image: Bigstock

Advanced Energy (AEIS) Q1 Earnings Beat, Revenues Rise Y/Y

Read MoreHide Full Article

Advanced Energy Industries, Inc. (AEIS - Free Report) reported first-quarter 2022 non-GAAP earnings of $1.24 per share, beating the Zacks Consensus Estimate by 31.9%. However, the bottom line declined 8.8% sequentially and 3.9% from the year-ago quarter.

Revenues of $397.5 million surpassed the Zacks Consensus Estimate of $360 million. The top line improved 13% from the year-ago quarter and 0.1% from the previous quarter.

Top-line growth was driven by strong momentum across all end markets.

A solid demand environment across all end markets remains a major positive for the company. Further, the latest acquisition of SL Power Electronics is expected to contribute well to the company’s performance in the industrial and medical market in the days ahead.

Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise

 

Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise

Advanced Energy Industries, Inc. price-consensus-eps-surprise-chart | Advanced Energy Industries, Inc. Quote

End Market in Detail

Semiconductor Equipment: Revenues generated from this market grew 12.3% year over year to $203 million (51% of total revenues), driven by the growing momentum across dielectric etch, RPS and panel-level packaging.

Industrial & Medical: Revenues from this market grew 5.7% year over year to $82.9 million (21% of revenues) in the reported quarter. Top-line growth in this market was driven by growing customer demand and a strong backlog.

Data Center Computing: Revenues from the market were $76.2 million (19% of revenues), up 28.9% from the year-ago quarter. This was attributed to improved scarce parts availability.

Telecom & Networking: Revenues generated from this market were $35.4 million (9% of the total revenues), up 6.1% from the prior-year quarter, owing to strong investments in 5G infrastructure, which bolstered the demand.

Operating Results

In the first quarter, the non-GAAP gross profit margin was 36.6%, which contracted 310 basis points (bps) from the year-ago quarter.

Non-GAAP operating expenses were $87.6 million, up 10.2% year over year. As a percentage of revenues, the figure expanded 60 bps year over year to 22% in the reported quarter.

The non-GAAP operating margin was 14.5%, contracting 260 bps from the prior-year quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2022, cash, cash equivalents, and marketable securities were $523.5 million compared with $546.7 million as of Dec 31, 2021.

Total debt was $387.9 million at the first-quarter end, down from $392.7 million at the fourth-quarter end.

For the first quarter, cash flow from operations was $9.9 million compared with $34.5 million in the fourth quarter.

The company made dividend payments of $3.8 million and repurchased shares worth $6.6 million in the quarter.

Guidance

For second-quarter 2022, Advanced Energy expects non-GAAP earnings of $1.05 per share (+/- 30 cents). The Zacks Consensus Estimate is pegged at $1.09 per share.

Further, the company anticipates revenues of $395 million (+/- $25 million). The Zacks Consensus Estimate for the same is pegged at $364.7 million.

Zacks Rank & Stocks to Consider

Currently, Advanced Energy has a Zacks Rank #3 (Hold).

Investors interested in the broader technology sector can consider stocks like Jabil (JBL - Free Report) , Jack Henry & Associates (JKHY - Free Report) , and Broadcom (AVGO - Free Report) . While Jabil currently sports a Zacks Rank #1 (Strong Buy), Jack Henry & Associates and Broadcom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Jabil has gained 5.5% over a year. The long-term earnings growth rate for JBL is currently projected at 12%.

Jack Henry & Associates has gained 16.9% over a year. The long-term earnings growth rate for JKHY is currently projected at 17%.

Broadcom has gained 20% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.