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MKS Instruments (MKSI) Q2 Earnings Top Estimates, Revenues Up
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MKS Instruments (MKSI - Free Report) reported second-quarter 2023 adjusted earnings of $1.32 per share, beating the Zacks Consensus Estimate by 18.92% but plunging 49% year over year.
Revenues of $1 billion beat the consensus mark by 2.81% and increased 31.1% year over year.
Products revenues (88.2% of total revenues) of $885 million beat the consensus mark by 2.73% and increased 33.3% year over year.
Services revenues (11.8% of total revenues) of $118 million beat the consensus mark by 4.3% and increased 16.8% year over year.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
Revenues from the semiconductor market (43.9% of total revenues) fell 14.6% year over year to $440 million. The metric beat the Zacks Consensus Estimate by 9.59%.
Electronics & Packaging revenues (22.4% of total revenues) were $225 million, up from $49 million reported in the year-ago quarter. The metric missed the consensus mark by 7.92%.
Specialty Industrial revenues (33.7% of total revenues) of $338 million beat the consensus mark by 2.8% and surged 68.2% year over year.
Operating Details
In the second quarter, the adjusted gross margin expanded 270 basis points (bps) on a year-over-year basis to 46.9%.
Adjusted EBITDA increased 22.1% year over year to $254 million. However, the adjusted EBITDA margin contracted 190 bps on a year-over-year basis to 25.3%.
Research & development and sales, general & administrative expenses, as a percentage of revenues, surged 50 bps and 390 bps on a year-over-year basis, respectively.
MKS Instruments reported a non-GAAP operating income of $227 million, up 23.4% year over year. The adjusted operating margin contracted 140 bps on a year-over-year basis to 22.6%.
Balance Sheet
As of Jun 30, 2023, MKS Instruments had cash and cash equivalents of $757 million compared with $880 million as of Mar 31, 2023.
Cash outflow by operations was $59 million in the second quarter compared with first-quarter 2023 cash inflow of $37 million.
Free cash outflow was $77 million compared with $20 million inflow reported in the previous quarter.
In the second quarter, the company paid a cash dividend of $15 million or 22 cents per share.
Guidance
For third-quarter 2023, MKSI expects total revenues of $930 million (+/- $50 million). Adjusted EBITDA is expected at $210 million (+/- $26 million).
Non-GAAP earnings are expected to be in the range of $1.27-$0.69 per share.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments has a Zacks Rank #3 (Hold).
MKSI shares have gained 21.1% against the Zacks Computer and Technology sector’s rise of 42.8% year to date.
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MKS Instruments (MKSI) Q2 Earnings Top Estimates, Revenues Up
MKS Instruments (MKSI - Free Report) reported second-quarter 2023 adjusted earnings of $1.32 per share, beating the Zacks Consensus Estimate by 18.92% but plunging 49% year over year.
Revenues of $1 billion beat the consensus mark by 2.81% and increased 31.1% year over year.
Products revenues (88.2% of total revenues) of $885 million beat the consensus mark by 2.73% and increased 33.3% year over year.
Services revenues (11.8% of total revenues) of $118 million beat the consensus mark by 4.3% and increased 16.8% year over year.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
MKS Instruments, Inc. price-consensus-eps-surprise-chart | MKS Instruments, Inc. Quote
Quarterly Update
Revenues from the semiconductor market (43.9% of total revenues) fell 14.6% year over year to $440 million. The metric beat the Zacks Consensus Estimate by 9.59%.
Electronics & Packaging revenues (22.4% of total revenues) were $225 million, up from $49 million reported in the year-ago quarter. The metric missed the consensus mark by 7.92%.
Specialty Industrial revenues (33.7% of total revenues) of $338 million beat the consensus mark by 2.8% and surged 68.2% year over year.
Operating Details
In the second quarter, the adjusted gross margin expanded 270 basis points (bps) on a year-over-year basis to 46.9%.
Adjusted EBITDA increased 22.1% year over year to $254 million. However, the adjusted EBITDA margin contracted 190 bps on a year-over-year basis to 25.3%.
Research & development and sales, general & administrative expenses, as a percentage of revenues, surged 50 bps and 390 bps on a year-over-year basis, respectively.
MKS Instruments reported a non-GAAP operating income of $227 million, up 23.4% year over year. The adjusted operating margin contracted 140 bps on a year-over-year basis to 22.6%.
Balance Sheet
As of Jun 30, 2023, MKS Instruments had cash and cash equivalents of $757 million compared with $880 million as of Mar 31, 2023.
Cash outflow by operations was $59 million in the second quarter compared with first-quarter 2023 cash inflow of $37 million.
Free cash outflow was $77 million compared with $20 million inflow reported in the previous quarter.
In the second quarter, the company paid a cash dividend of $15 million or 22 cents per share.
Guidance
For third-quarter 2023, MKSI expects total revenues of $930 million (+/- $50 million). Adjusted EBITDA is expected at $210 million (+/- $26 million).
Non-GAAP earnings are expected to be in the range of $1.27-$0.69 per share.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments has a Zacks Rank #3 (Hold).
MKSI shares have gained 21.1% against the Zacks Computer and Technology sector’s rise of 42.8% year to date.
Chegg (CHGG - Free Report) , PubMatic (PUBM - Free Report) , and Lyft (LYFT - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chegg shares have declined 59.8% year to date. CHGG is set to report its second-quarter 2023 results on Aug 7.
PubMatic shares have gained 51.7% year to date. PUBM is set to report its second-quarter 2023 results on Aug 8.
Lyft shares have gained 6.3% year to date. LYFT is set to report its second-quarter 2023 results on Aug 8.