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Investing in Advanced Energy (AEIS)? Don't Miss Assessing Its International Revenue Trends

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Have you evaluated the performance of Advanced Energy Industries' (AEIS - Free Report) international operations for the quarter ending March 2024? Given the extensive global presence of this maker of power-conversion products, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.

The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.

Participation in global economies acts as a defense against economic difficulties at home and a pathway to more rapidly developing economies. However, it also comes with the complexities of dealing with fluctuating currencies, geopolitical risks and different market dynamics.

Upon examining AEIS' recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter amounted to $327.48 million, showing decrease of 23%. We will now explore the breakdown of AEIS' overseas revenue to assess the impact of its international operations.

Trends in AEIS' Revenue from International Markets

Asia accounted for 46.4% of the company's total revenue during the quarter, translating to $151.94 million. Revenues from this region represented a surprise of +2.56%, with Wall Street analysts collectively expecting $148.15 million. When compared to the preceding quarter and the same quarter in the previous year, Asia contributed $169.7 million (41.9%) and $179.18 million (42.2%) to the total revenue, respectively.

Other countries generated $0.9 million in revenues for the company in the last quarter, constituting 0.3% of the total. This represented a surprise of -75.68% compared to the $3.7 million projected by Wall Street analysts. Comparatively, in the previous quarter, Other countries accounted for $0.83 million (0.2%), and in the year-ago quarter, it contributed $2.35 million (0.6%) to the total revenue.

Of the total revenue, $40.55 million came from Europe during the last fiscal quarter, accounting for 12.4%. This represented a surprise of -14.21% as analysts had expected the region to contribute $47.27 million to the total revenue. In comparison, the region contributed $47.5 million, or 11.7%, and $62.57 million, or 14.7%, to total revenue in the previous and year-ago quarters, respectively.

International Market Revenue Projections

The current fiscal quarter's total revenue for Advanced Energy, as projected by Wall Street analysts, is expected to reach $339.4 million, reflecting a decline of 18.3% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia is anticipated to contribute 48.7% or $165.13 million, Other countries 0.8% or $2.69 million and Europe 14.1% or $47.82 million.

For the entire year, the company's total revenue is forecasted to be $1.52 billion, which is a reduction of 8.1% from the previous year. The revenue contributions from different regions are expected as follows: Asia will contribute 43.7% ($665.29 million), Other countries 0.6% ($8.58 million) and Europe 12.8% ($194.7 million) to the total revenue.

Key Takeaways

The dependency of Advanced Energy on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.

In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Advanced Energy, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Exploring Recent Trends in Advanced Energy's Stock Price

Over the preceding four weeks, the stock's value has appreciated by 1.1%, against a downturn of 0.4% in the Zacks S&P 500 composite. In parallel, the Zacks Computer and Technology sector, which counts Advanced Energy among its entities, has appreciated by 0.9%. Over the past three months, the company's shares have seen a decline of 5.2% versus the S&P 500's 4.9% increase. The sector overall has witnessed an increase of 5.3% over the same period.


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