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Why Is MKS Instruments (MKSI) Up 24.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for MKS Instruments (MKSI - Free Report) . Shares have added about 24.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MKS Instruments due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
MKS Instruments Q3 Earnings Top Estimates, Revenues Down
MKS Instruments reported third-quarter 2023 adjusted earnings of $1.46 per share, beating the Zacks Consensus Estimate by 46% but declining 46.7% year over year.
Revenues of $932 million miss the consensus mark by 0.01% and decreased 2.3% year over year.
Products revenues (87.8% of total revenues) were $818 million, down 2.7% year over year. Services revenues (12.2% of total revenues) increased 0.9% to $114 million.
Quarterly Update
Revenues from the semiconductor market (39.4% of total revenues) declined 31.4% year over year to $367 million.
Electronics & Packaging revenues (26.1% of total revenues) were $243 million, up 46.4% year over year.
Specialty Industrial revenues (34.5% of total revenues) increased 27.3% year over year to $322 million.
Operating Details
In the third quarter, the adjusted gross margin expanded 210 basis points (bps) on a year-over-year basis to 47.1%.
Adjusted EBITDA fell 12.3% year over year to $235 million. Adjusted EBITDA margin contracted 290 bps on a year-over-year basis to 25.2%.
Research & development and sales, general & administrative expenses, as a percentage of revenues, surged 100 bps and 470 bps on a year-over-year basis, respectively.
MKS Instruments reported a non-GAAP operating income of $203 million, down 15.4% year over year. The adjusted operating margin contracted 340 bps on a year-over-year basis to 21.8%.
Balance Sheet
As of Sep 30, 2023, MKS Instruments had cash and cash equivalents of $860 million. Total debt was $4.87 billion.
Cash flow from operations was $160 million in the third quarter compared with the second-quarter 2023 cash outflow of $59 million.
Free cash flow was $142 million compared with free cash outflow of $77 million reported in the previous quarter.
Guidance
For the fourth quarter of 2023, MKSI expects revenue of $840 million, plus or minus $40 million.
Adjusted EBITDA of $185 million, plus or minus $20 million.
Non-GAAP earnings are expected to be 85 cents, plus or minus 27 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -7.65% due to these changes.
VGM Scores
Currently, MKS Instruments has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, MKS Instruments has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is MKS Instruments (MKSI) Up 24.8% Since Last Earnings Report?
A month has gone by since the last earnings report for MKS Instruments (MKSI - Free Report) . Shares have added about 24.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MKS Instruments due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
MKS Instruments Q3 Earnings Top Estimates, Revenues Down
MKS Instruments reported third-quarter 2023 adjusted earnings of $1.46 per share, beating the Zacks Consensus Estimate by 46% but declining 46.7% year over year.
Revenues of $932 million miss the consensus mark by 0.01% and decreased 2.3% year over year.
Products revenues (87.8% of total revenues) were $818 million, down 2.7% year over year. Services revenues (12.2% of total revenues) increased 0.9% to $114 million.
Quarterly Update
Revenues from the semiconductor market (39.4% of total revenues) declined 31.4% year over year to $367 million.
Electronics & Packaging revenues (26.1% of total revenues) were $243 million, up 46.4% year over year.
Specialty Industrial revenues (34.5% of total revenues) increased 27.3% year over year to $322 million.
Operating Details
In the third quarter, the adjusted gross margin expanded 210 basis points (bps) on a year-over-year basis to 47.1%.
Adjusted EBITDA fell 12.3% year over year to $235 million. Adjusted EBITDA margin contracted 290 bps on a year-over-year basis to 25.2%.
Research & development and sales, general & administrative expenses, as a percentage of revenues, surged 100 bps and 470 bps on a year-over-year basis, respectively.
MKS Instruments reported a non-GAAP operating income of $203 million, down 15.4% year over year. The adjusted operating margin contracted 340 bps on a year-over-year basis to 21.8%.
Balance Sheet
As of Sep 30, 2023, MKS Instruments had cash and cash equivalents of $860 million. Total debt was $4.87 billion.
Cash flow from operations was $160 million in the third quarter compared with the second-quarter 2023 cash outflow of $59 million.
Free cash flow was $142 million compared with free cash outflow of $77 million reported in the previous quarter.
Guidance
For the fourth quarter of 2023, MKSI expects revenue of $840 million, plus or minus $40 million.
Adjusted EBITDA of $185 million, plus or minus $20 million.
Non-GAAP earnings are expected to be 85 cents, plus or minus 27 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -7.65% due to these changes.
VGM Scores
Currently, MKS Instruments has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, MKS Instruments has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.