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MKS Instruments (MKSI) Up 1.4% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for MKS Instruments (MKSI - Free Report) . Shares have added about 1.4% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.

MKS Instruments Q1 Earnings Top Estimates, Revenues Up

MKS Instruments reported adjusted earnings of $1.18 per share in first-quarter 2024, up from the year-ago quarter’s earnings of 48 cents. The figure beat the Zacks Consensus Estimate by 57.33%.

Revenues of $868 million beat the consensus mark by 0.73% and increased 9.3% year over year.
Products revenues (86.9% of total revenues) were $754 million, up 5.9% year over year. Services revenues (13.1% of total revenues) rallied 39% year over year to $114 million.

Quarterly Update

Revenues from the Semiconductor market (40.4% of total revenues) increased 13.6% year over year to $351 million. The figure beat the Zacks Consensus Estimate by 6.70%.

Electronics & Packaging revenues (24% of total revenues) were $208 million, lower than $222 million reported in the year-ago quarter. The figure missed the Zacks Consensus Estimate by 5.13%.

Specialty Industrial revenues (35.6% of total revenues) increased 17.5% year over year to $309 million. However, the figure missed the Zacks Consensus Estimate by 1.44%.

Operating Details

In the first quarter, the adjusted gross margin expanded 560 basis points (bps) on a year-over-year basis to 47.8%.

Research & development and sales, general & administrative expenses, as a percentage of revenues, declined 100 bps and 230 bps on a year-over-year basis, respectively.

MKS Instruments reported a non-GAAP operating income of $175 million, up 82.3% year over year. The adjusted operating margin expanded 810 bps on a year-over-year basis to 20.2%.

Adjusted EBITDA was up 55% year over year to $217 million. Adjusted EBITDA margin widened 740 bps on a year-over-year basis to 25%.

Balance Sheet

As of Mar 31, 2024, MKS Instruments had cash and cash equivalents of $845 million compared with $875 million as of Dec 31, 2023.

Cash flow from operations was $67 million in the first-quarter 2024 compared with the fourth-quarter 2023 figure of $180 million.

Free cash flow was $49 million compared with $146 million reported in the previous quarter.

In the first quarter, the company paid a cash dividend of $15 million or 22 cents per share.


MKSI expects second-quarter 2024 revenues of $860 million (+/- $40 million).

The company expects an Adjusted EBITDA of $197 million (+/- 23 million).

On a non-GAAP basis, MKSI expects earnings of 93 cents (+/- 26 cents) per share.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -11.32% due to these changes.

VGM Scores

At this time, MKS Instruments has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.


Estimates have been broadly trending downward for the stock, and the magnitude of this revision 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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