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Advanced Energy (AEIS) Q1 Earnings Beat, Revenues Rise Y/Y
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Advanced Energy Industries, Inc. (AEIS - Free Report) reported first-quarter 2023 non-GAAP earnings of $1.24 per share, beating the Zacks Consensus Estimate by 10.7%. The bottom line remained flat on a year-over-year basis.
Revenues of $425.04 million surpassed the Zacks Consensus Estimate of $411.13 million. The top line improved 7% year over year.
Strong momentum across the Industrial and Medical and Telecom and Networking end markets drove top-line growth in the reported quarter.
However, softness across Semiconductor Equipment and Data Center Computing markets was a concern.
Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise
Semiconductor Equipment: Revenues generated from the market fell 4% year over year to $194.21 million (45.7% of the total revenues).
Nevertheless, solid demand for high voltage and growing design wins in etch and deposition were positives.
Industrial & Medical: Revenues from the market grew 48% year over year to $123.02 million (29% of the total revenues) in the reported quarter. Top-line growth in the market was driven by growing design wins in industrial and medical applications. Also, strong demand for thin film was a tailwind.
Data Center Computing: Revenues from the market were $59.7 million (14% of the total revenues), down 22% from the year-ago quarter’s level. Component shortage and weakening momentum among hyper-scale customers were concerns.
Telecom & Networking: Revenues generated from the market were $48.15 million (11.3% of the total revenues), up 36% from the prior-year quarter’s level.
Operating Results
In the first quarter, GAAP gross margin was 36.5%, which expanded 20 basis points (bps) year over year. The non-GAAP gross margin was 36.8%, expanding 20 bps from the year-ago quarter’s level.
Non-GAAP operating expenses were $99.7 million, up 13.8% year over year. As a percentage of revenues, the figure expanded 147 bps year over year to 23.5% in the reported quarter.
The non-GAAP operating margin was 13.4%, contracting 110 bps from the prior-year quarter’s level.
Balance Sheet & Cash Flow
As of Mar 31, 2023, cash and cash equivalents were $461.7 million compared with $458.82 million as of Dec 31, 2022.
Total debt was $368.4 million at the first-quarter end, down from $373.3 million at the fourth-quarter end.
For the first quarter, cash flow from operations was $31.9 million, which dropped from $70.7 million in the fourth quarter.
Advanced Energy made dividend payments of $3.8 million in the reported quarter.
Guidance
For second-quarter 2023, Advanced Energy expects non-GAAP earnings of $1.00 per share (+/- 25 cents). The Zacks Consensus Estimate is pegged at $1.13 per share.
Advanced Energy anticipates revenues of $410 million (+/- $20 million). The Zacks Consensus Estimate for the same is pegged at $417.39 million.
Zacks Rank & Stocks to Consider
Currently, Advanced Energy has a Zacks Rank #3 (Hold).
Agilent Technologies is set to report second-quarter fiscal 2023 results on May 23. The Zacks Consensus Estimate for A’s earnings is pegged at $1.27 per share, implying growth of 12.4% from the year-ago quarter’s reported figure. A has lost 11.6% in the year-to-date period.
DigitalOcean is scheduled to release first-quarter 2023 results on May 9. The Zacks Consensus Estimate for DOCN’s earnings is pegged at 29 cents per share, suggesting a jump from 7 cents per share reported in the prior-year quarter. DOCN has gained 25.5% in the year-to-date period.
Paycor HCM is scheduled to report third-quarter fiscal 2023 results on May 10. The Zacks Consensus Estimate for PYCR’s earnings is pegged at 15 cents per share, suggesting an increase of 36.4% from the prior-year quarter’s reported figure. PYCR has gained 26% in the year-to-date period.
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Advanced Energy (AEIS) Q1 Earnings Beat, Revenues Rise Y/Y
Advanced Energy Industries, Inc. (AEIS - Free Report) reported first-quarter 2023 non-GAAP earnings of $1.24 per share, beating the Zacks Consensus Estimate by 10.7%. The bottom line remained flat on a year-over-year basis.
Revenues of $425.04 million surpassed the Zacks Consensus Estimate of $411.13 million. The top line improved 7% year over year.
Strong momentum across the Industrial and Medical and Telecom and Networking end markets drove top-line growth in the reported quarter.
However, softness across Semiconductor Equipment and Data Center Computing markets was a concern.
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 the market fell 4% year over year to $194.21 million (45.7% of the total revenues).
Nevertheless, solid demand for high voltage and growing design wins in etch and deposition were positives.
Industrial & Medical: Revenues from the market grew 48% year over year to $123.02 million (29% of the total revenues) in the reported quarter. Top-line growth in the market was driven by growing design wins in industrial and medical applications. Also, strong demand for thin film was a tailwind.
Data Center Computing: Revenues from the market were $59.7 million (14% of the total revenues), down 22% from the year-ago quarter’s level. Component shortage and weakening momentum among hyper-scale customers were concerns.
Telecom & Networking: Revenues generated from the market were $48.15 million (11.3% of the total revenues), up 36% from the prior-year quarter’s level.
Operating Results
In the first quarter, GAAP gross margin was 36.5%, which expanded 20 basis points (bps) year over year. The non-GAAP gross margin was 36.8%, expanding 20 bps from the year-ago quarter’s level.
Non-GAAP operating expenses were $99.7 million, up 13.8% year over year. As a percentage of revenues, the figure expanded 147 bps year over year to 23.5% in the reported quarter.
The non-GAAP operating margin was 13.4%, contracting 110 bps from the prior-year quarter’s level.
Balance Sheet & Cash Flow
As of Mar 31, 2023, cash and cash equivalents were $461.7 million compared with $458.82 million as of Dec 31, 2022.
Total debt was $368.4 million at the first-quarter end, down from $373.3 million at the fourth-quarter end.
For the first quarter, cash flow from operations was $31.9 million, which dropped from $70.7 million in the fourth quarter.
Advanced Energy made dividend payments of $3.8 million in the reported quarter.
Guidance
For second-quarter 2023, Advanced Energy expects non-GAAP earnings of $1.00 per share (+/- 25 cents). The Zacks Consensus Estimate is pegged at $1.13 per share.
Advanced Energy anticipates revenues of $410 million (+/- $20 million). The Zacks Consensus Estimate for the same is pegged at $417.39 million.
Zacks Rank & Stocks to Consider
Currently, Advanced Energy has a Zacks Rank #3 (Hold).
Investors interested in the broader technology sector can consider some better-ranked stocks like Agilent Technologies (A - Free Report) , DigitalOcean (DOCN - Free Report) and Paycor HCM (PYCR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Agilent Technologies is set to report second-quarter fiscal 2023 results on May 23. The Zacks Consensus Estimate for A’s earnings is pegged at $1.27 per share, implying growth of 12.4% from the year-ago quarter’s reported figure. A has lost 11.6% in the year-to-date period.
DigitalOcean is scheduled to release first-quarter 2023 results on May 9. The Zacks Consensus Estimate for DOCN’s earnings is pegged at 29 cents per share, suggesting a jump from 7 cents per share reported in the prior-year quarter. DOCN has gained 25.5% in the year-to-date period.
Paycor HCM is scheduled to report third-quarter fiscal 2023 results on May 10. The Zacks Consensus Estimate for PYCR’s earnings is pegged at 15 cents per share, suggesting an increase of 36.4% from the prior-year quarter’s reported figure. PYCR has gained 26% in the year-to-date period.