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Onto Innovation (ONTO) Q4 Earnings & Revenues Top, Fall Y/Y
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Onto Innovation Inc (ONTO - Free Report) reported fourth-quarter 2023 earnings of $1.06 per share, which beat the Zacks Consensus Estimate by 7.1%. The bottom line decreased 32.5% year over year.
Revenues of $218.9 million beat the Zacks Consensus Estimate by 5.2%. The top line declined 13.6% year over year. The downtick can be mainly attributed to a decline in advanced nodes business and lower services parts revenues.
However, revenues came in ahead of the company’s guided range of $200-$216 million owing to better-than-anticipated demand for the Dragonfly inspection system to support the packaging of memory and logic devices for AI applications. Management expects the demand to remain at elevated levels in the first quarter of 2024 as well.
Advanced nodes revenues of $18 million declined 30% sequentially.
Specialty devices and advanced packaging revenues of $158 million increased 17% sequentially. Revenues from software and services were down 8% sequentially to $42 million.
Sales from specialty devices and advanced packaging, and advanced node markets contributed 72% and 8% to revenues, respectively. Software and services accounted for 20% of the top line.
Onto Innovation Inc. Price, Consensus and EPS Surprise
Non-GAAP operating expenses were $56.4 million, declining 8% from $61.2 million in the prior year quarter.
Non-GAAP gross profit fell to $112.8 million from $137.3 million in the year-earlier quarter. Non-GAAP gross profit margin contracted 200 basis points to 52%.
Non-GAAP operating income was $56.4 million compared with $76.1 million in the year-ago quarter. Non-GAAP operating margin was 26%, down from 30% in the previous-year quarter.
Balance Sheet
As of Dec 31, 2023, the company had $697.8 million in cash and cash equivalents with $147.7 million of total current liabilities compared with $629.7 million and $135.8 million, respectively, as of Sep 30, 2023. Accounts receivable was $226.6 million.
Q1 Guidance
Management expects revenues in the range of $215-$230 million. The Zacks Consensus Estimate is pegged at $215.4 million.
Non-GAAP earnings per share are projected to be between $1.00 and $1.20. The consensus mark is pegged at $1.03 per share.
Gross margin is forecast to be in the range of 51-53%. Operating expenses are expected to be between $58 million and $60 million. Operating expenses are expected to be higher than in the fourth quarter owing to the annual reset of payroll taxes and other compensation components.
Zacks Rank
Onto Innovation currently has a Zacks Rank #3 (Hold)
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Watts Water Technologies (WTS - Free Report) , Manhattan Associates (MANH - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates currently sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Watts Water Technologies’ 2023 EPS has improved by 1 cent to $8.09 in the past 60 days.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 21.2% in the past year.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased by 3.6% in the past 60 days to $3.76.
Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 72.7% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 earnings is pegged at $11.60 per share, indicating growth of 18.3% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is pegged at 16.2%. MSFT has gained 57.4% in the past year.
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Onto Innovation (ONTO) Q4 Earnings & Revenues Top, Fall Y/Y
Onto Innovation Inc (ONTO - Free Report) reported fourth-quarter 2023 earnings of $1.06 per share, which beat the Zacks Consensus Estimate by 7.1%. The bottom line decreased 32.5% year over year.
Revenues of $218.9 million beat the Zacks Consensus Estimate by 5.2%. The top line declined 13.6% year over year. The downtick can be mainly attributed to a decline in advanced nodes business and lower services parts revenues.
However, revenues came in ahead of the company’s guided range of $200-$216 million owing to better-than-anticipated demand for the Dragonfly inspection system to support the packaging of memory and logic devices for AI applications. Management expects the demand to remain at elevated levels in the first quarter of 2024 as well.
Advanced nodes revenues of $18 million declined 30% sequentially.
Specialty devices and advanced packaging revenues of $158 million increased 17% sequentially. Revenues from software and services were down 8% sequentially to $42 million.
Sales from specialty devices and advanced packaging, and advanced node markets contributed 72% and 8% to revenues, respectively. Software and services accounted for 20% of the top line.
Onto Innovation Inc. Price, Consensus and EPS Surprise
Onto Innovation Inc. price-consensus-eps-surprise-chart | Onto Innovation Inc. Quote
Margin Details
Non-GAAP operating expenses were $56.4 million, declining 8% from $61.2 million in the prior year quarter.
Non-GAAP gross profit fell to $112.8 million from $137.3 million in the year-earlier quarter. Non-GAAP gross profit margin contracted 200 basis points to 52%.
Non-GAAP operating income was $56.4 million compared with $76.1 million in the year-ago quarter. Non-GAAP operating margin was 26%, down from 30% in the previous-year quarter.
Balance Sheet
As of Dec 31, 2023, the company had $697.8 million in cash and cash equivalents with $147.7 million of total current liabilities compared with $629.7 million and $135.8 million, respectively, as of Sep 30, 2023. Accounts receivable was $226.6 million.
Q1 Guidance
Management expects revenues in the range of $215-$230 million. The Zacks Consensus Estimate is pegged at $215.4 million.
Non-GAAP earnings per share are projected to be between $1.00 and $1.20. The consensus mark is pegged at $1.03 per share.
Gross margin is forecast to be in the range of 51-53%. Operating expenses are expected to be between $58 million and $60 million. Operating expenses are expected to be higher than in the fourth quarter owing to the annual reset of payroll taxes and other compensation components.
Zacks Rank
Onto Innovation currently has a Zacks Rank #3 (Hold)
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Watts Water Technologies (WTS - Free Report) , Manhattan Associates (MANH - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates currently sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Watts Water Technologies’ 2023 EPS has improved by 1 cent to $8.09 in the past 60 days.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 21.2% in the past year.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased by 3.6% in the past 60 days to $3.76.
Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 72.7% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 earnings is pegged at $11.60 per share, indicating growth of 18.3% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is pegged at 16.2%. MSFT has gained 57.4% in the past year.