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Advanced Energy (AEIS) Q1 Earnings Miss Estimates, Revenues Fall Y/Y
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Advanced Energy Industries (AEIS - Free Report) reported non-GAAP earnings of 58 cents per share in first-quarter 2024, missing the Zacks Consensus Estimate by 18.31%. The bottom-line figure declined 53.2% on a year-over-year basis.
Revenues of $327 million lagged the Zacks Consensus Estimate by 8.35% and declined 23% year over year, primarily due to the weakness across non-semi markets.
End Market in Detail
Semiconductor Equipment: Revenues (54.9% of total revenues) generated from the market fell 7.4% year over year to $179.9 million. The figure topped the Zacks Consensus Estimate by 7.94%.
Sequentially, revenues decreased 6%. The upside was primarily due to the surge in value-added services within the semiconductor segment.
Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise
Additionally, securing major design wins for next-generation plasma power products, namely the eVoS and eVerest systems, bolstered semiconductor revenue.
AEIS has already shipped more than 50 eVoS and eVerest systems, with another 150 systems requested before the year-end.
Industrial & Medical: Revenues (25.5% of the total revenues) from the market fell 32.2% year over year to $83.4 million and lagged the Zacks Consensus Estimate by 21.66%.
Soft market conditions hurt top-line growth.
Sequentially, revenues declined 23%. Nevertheless, AEIS launched new products, such as the Evergreen high-power platform in the industrial medical segment, which provides best-in-class efficiency and power density.
Data Center Computing: Revenues (12.8% of the total revenues) from the market were $41.9 million, down 29.8% year over year. The figure missed the consensus mark by 13.30%.
Sequentially, revenues declined 33%. The softness in the enterprise market was partially offset by the increased volume of the hyperscale product.
Telecom & Networking: Revenues (6.8% of the total revenues) generated from the market were $22.3 million, down 53.8% year over year. The figure missed the Zacks Consensus Estimate by 37.9%.
Sequentially, revenues declined 48%. The decline was primarily due to reduced infrastructure investments and high inventory levels.
Operating Results
In the first quarter, the non-GAAP gross margin was 35.12%, down 170 basis points (bps) on a year-over-year basis.
Non-GAAP operating expenses were $93.5 million, down 6.2% year over year. As a percentage of revenues, the figure increased 510 bps year over year to 28.6% in the reported quarter.
The non-GAAP operating margin was 6.6%, contracting 680 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash and cash equivalents were $1.01 billion compared with $1.05 million as of Dec 31, 2023.
In the first quarter of 2024, cash flow from operations was $8 million, down from $85 million in the fourth quarter of 2023.
Advanced Energy made dividend payments of $3.8 million in the reported quarter.
Guidance
For second-quarter 2024, Advanced Energy expects non-GAAP earnings of 73 cents per share (+/- 25 cents).
Advanced Energy anticipates revenues of $350 million (+/- $20 million).
Zacks Rank & Stocks to Consider
AEIS currently carries a Zacks Rank #3 (Hold).
The company’s shares have declined 11.7% in the year-to-date period compared with the Zacks Computer & Technology sector’s growth of 7.6%.
Image: Bigstock
Advanced Energy (AEIS) Q1 Earnings Miss Estimates, Revenues Fall Y/Y
Advanced Energy Industries (AEIS - Free Report) reported non-GAAP earnings of 58 cents per share in first-quarter 2024, missing the Zacks Consensus Estimate by 18.31%. The bottom-line figure declined 53.2% on a year-over-year basis.
Revenues of $327 million lagged the Zacks Consensus Estimate by 8.35% and declined 23% year over year, primarily due to the weakness across non-semi markets.
End Market in Detail
Semiconductor Equipment: Revenues (54.9% of total revenues) generated from the market fell 7.4% year over year to $179.9 million. The figure topped the Zacks Consensus Estimate by 7.94%.
Sequentially, revenues decreased 6%. The upside was primarily due to the surge in value-added services within the semiconductor segment.
Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise
Advanced Energy Industries, Inc. price-consensus-eps-surprise-chart | Advanced Energy Industries, Inc. Quote
Additionally, securing major design wins for next-generation plasma power products, namely the eVoS and eVerest systems, bolstered semiconductor revenue.
AEIS has already shipped more than 50 eVoS and eVerest systems, with another 150 systems requested before the year-end.
Industrial & Medical: Revenues (25.5% of the total revenues) from the market fell 32.2% year over year to $83.4 million and lagged the Zacks Consensus Estimate by 21.66%.
Soft market conditions hurt top-line growth.
Sequentially, revenues declined 23%. Nevertheless, AEIS launched new products, such as the Evergreen high-power platform in the industrial medical segment, which provides best-in-class efficiency and power density.
Data Center Computing: Revenues (12.8% of the total revenues) from the market were $41.9 million, down 29.8% year over year. The figure missed the consensus mark by 13.30%.
Sequentially, revenues declined 33%. The softness in the enterprise market was partially offset by the increased volume of the hyperscale product.
Telecom & Networking: Revenues (6.8% of the total revenues) generated from the market were $22.3 million, down 53.8% year over year. The figure missed the Zacks Consensus Estimate by 37.9%.
Sequentially, revenues declined 48%. The decline was primarily due to reduced infrastructure investments and high inventory levels.
Operating Results
In the first quarter, the non-GAAP gross margin was 35.12%, down 170 basis points (bps) on a year-over-year basis.
Non-GAAP operating expenses were $93.5 million, down 6.2% year over year. As a percentage of revenues, the figure increased 510 bps year over year to 28.6% in the reported quarter.
The non-GAAP operating margin was 6.6%, contracting 680 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash and cash equivalents were $1.01 billion compared with $1.05 million as of Dec 31, 2023.
In the first quarter of 2024, cash flow from operations was $8 million, down from $85 million in the fourth quarter of 2023.
Advanced Energy made dividend payments of $3.8 million in the reported quarter.
Guidance
For second-quarter 2024, Advanced Energy expects non-GAAP earnings of 73 cents per share (+/- 25 cents).
Advanced Energy anticipates revenues of $350 million (+/- $20 million).
Zacks Rank & Stocks to Consider
AEIS currently carries a Zacks Rank #3 (Hold).
The company’s shares have declined 11.7% in the year-to-date period compared with the Zacks Computer & Technology sector’s growth of 7.6%.
Arista Networks (ANET - Free Report) , Applied Material (AMAT - Free Report) and Dell Technologies (DELL - Free Report) are some better-ranked stocks that investors can consider in the broader sector. ANET sports a Zacks Rank #1 (Strong Buy), while DELL and AMAT carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have increased 8.4% year to date. ANET is set to report its first-quarter 2024 results on May 7.
Applied Material’s shares have gained 19.7% year to date. AMAT is set to report second-quarter fiscal 2024 results on May 16.
Dell Technologies’ shares have surged 55.3% year to date. DELL is set to report its first-quarter fiscal 2025 results on May 30.