Enetgris ( ENTG Quick Quote ENTG - Free Report) reported first-quarter 2023 non-GAAP earnings of 65 cents per share, which beat the Zacks Consensus Estimate by 25%. However, the bottom line declined 38.7% year over year. The reported figure was above management’s earnings guidance of 50-55 cents.
Revenues of $922.4 million beat the consensus mark by 3.65%. The top line increased 42% year over year. The reported figure was above management’s guidance of $880-$910 million.
The top line was affected primarily by losses incurred in foreign exchange transactions. Entegris’ top-line growth was hurt by approximately 3% in the first quarter.
Specialty Chemicals and Engineered Materials (SCEM) revenues increased 19.4% year over year to $198 million. Growth in SCEM revenues was driven by the inclusion of certain product lines from the acquisition of CMC Materials.
Advanced Planarization Solutions (APS) revenues increased 716.9% year over year to $250.3 million. The upside can be attributed to significant growth in SiC slurries and sales from the CMC Materials acquisition.
Microcontamination Control (MC) revenues increased 1% year over year to $269.3 million. The upside was driven by increased demand for its liquid microcontamination products and easing supply chain constraints.
Advanced Materials Handling (AMH) revenues increased 10.5% year over year to $218.9 million, courtesy of strong demand for wafer handling and fluid handling solutions.
Adjusted operating expenses were $204.3 million, which expanded by 250 bps to 22.1%.
Entegris reported a non-GAAP operating margin of 22.2%, which declined 590 bps year over year.
Entegris reported adjusted EBITDA margin of 27.3%, contracting 450 bps year over year.
Balance Sheet & Cash Flow
Enetgris had cash, cash equivalents & restricted cash of $709 million as of Mar 31, 2023, compared with $563.4 million as of Dec 31, 2022.
The company had long-term debt, excluding current maturities of $5.63 billion compared with $5.63 billion as of Dec 31, 2022.
It generated $151.9 million in cash from operations compared with $32.1 million in the previous quarter.
Free cash flow was $17.9 million compared with cash outflow of $115.3 million reported in the prior quarter.
Second-quarter 2023 revenues are expected between $870 million and $900 million for the combined company of Entegris and CMC Materials.
Adjusted EBITDA margin is expected to be 27%-28% of sales in the second quarter of 2023.
Zacks Rank & Stocks to Consider
Entegris currently carries a Zacks Rank #3 (Hold).
ENTG’s shares have increased 42.5% compared with the Zacks
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