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MKS Instruments (MKSI) Q3 Earnings Top, Revenues Up Y/Y
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Premium scientific & technical instruments company, MKS Instruments, Inc. (MKSI - Free Report) reported robust third-quarter 2016 earnings. The stellar performance was primarily driven by robust semiconductor business.
The company’s quarterly adjusted earnings of 88 cents per share comfortably surpassed the Zacks Consensus Estimate of 78 cents. The bottom line also soared 49.2% year over year.
Revenues
Net revenues came in at $380.7 million, up 81.8% year over year. In addition, the top line surpassed the Zacks Consensus Estimate of $369 million. The company claimed that its in-depth customer relationships in business supported the year-over-year upside.
In the reported quarter, revenues from the sale of Products came in at $335.2 million, while sales from Services amounted to $45.5 million. Products revenues represent 88% of the total revenue, while sales from Services account for the remainder.
Margins/Costs
MKS Instruments’ adjusted gross profit margin for the quarter expanded 50 basis points (bps) year over year to 45.5%. Selling, general and administrative expenses totaled $70.4 million as against $33.4 million in the year-ago comparable period. Research and development expenditure surged 87.4% year over year to $32.3 million. Adjusted operating margin was 19.2% compared with 20.8% a year ago.
Balance Sheet
MKS Instruments’ cash and cash equivalents at the end of the quarter were $366.9 million compared with $227.6 million at year-end 2015. At the end of the quarter, the company had total assets worth $2,241.7 million as against $1,273.3 million as of Dec 31, 2015. Long-term debt for the third-quarter was $639.1 million.
During the quarter, the company paid dividends worth $9.1 million to its shareholders.
Outlook
MKS Instruments expects favorable business environment at its end markets to drive growth going forward. The company aims to widen its near-term margin by strategically cutting down interest costs. Since the completion of Newport Corporation acquisition, the company has lowered its interest expense by roughly $9 million with voluntary pre-payments and debt repricing done in Jun 9, 2016.
MKS Instruments expects the strategic integration of Newport to aid it launch innovative technologies and generate $35 million worth cost synergies for 2016. The company projects revenues in the range of $370–$410 million and adjusted earnings per share in $0.87-$1.10 per share range for fourth-quarter 2016.
Based on its recently implemented combined targeted operating model, MKS Instruments estimates roughly $1.4 billion revenues in 2016. Annual adjusted earnings are anticipated in the range of $2.97–$2.35 per share. The full-year adjusted operating and gross margins are anticipated in the range of 18–20% and 45–47%, respectively.
Some better-ranked stocks within the industry that warrant a look include:
Applied Optoelectronics, Inc. (AAOI - Free Report) currently sports a Zacks Rank #1 and has an average positive earnings surprise of 91.96% over the four trailing quarters.
Analog Devices, Inc. (ADI - Free Report) currently sports a Zacks Rank #1 and has an average positive earnings surprise of 10.22% over the last four quarters.
Autodesk, Inc. (ADSK - Free Report) currently has a Zacks Rank #1 and has an average positive earnings surprise of 52.38% over the trailing four quarters.
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MKS Instruments (MKSI) Q3 Earnings Top, Revenues Up Y/Y
Premium scientific & technical instruments company, MKS Instruments, Inc. (MKSI - Free Report) reported robust third-quarter 2016 earnings. The stellar performance was primarily driven by robust semiconductor business.
The company’s quarterly adjusted earnings of 88 cents per share comfortably surpassed the Zacks Consensus Estimate of 78 cents. The bottom line also soared 49.2% year over year.
Revenues
Net revenues came in at $380.7 million, up 81.8% year over year. In addition, the top line surpassed the Zacks Consensus Estimate of $369 million. The company claimed that its in-depth customer relationships in business supported the year-over-year upside.
In the reported quarter, revenues from the sale of Products came in at $335.2 million, while sales from Services amounted to $45.5 million. Products revenues represent 88% of the total revenue, while sales from Services account for the remainder.
Margins/Costs
MKS Instruments’ adjusted gross profit margin for the quarter expanded 50 basis points (bps) year over year to 45.5%. Selling, general and administrative expenses totaled $70.4 million as against $33.4 million in the year-ago comparable period. Research and development expenditure surged 87.4% year over year to $32.3 million. Adjusted operating margin was 19.2% compared with 20.8% a year ago.
Balance Sheet
MKS Instruments’ cash and cash equivalents at the end of the quarter were $366.9 million compared with $227.6 million at year-end 2015. At the end of the quarter, the company had total assets worth $2,241.7 million as against $1,273.3 million as of Dec 31, 2015. Long-term debt for the third-quarter was $639.1 million.
During the quarter, the company paid dividends worth $9.1 million to its shareholders.
Outlook
MKS Instruments expects favorable business environment at its end markets to drive growth going forward. The company aims to widen its near-term margin by strategically cutting down interest costs. Since the completion of Newport Corporation acquisition, the company has lowered its interest expense by roughly $9 million with voluntary pre-payments and debt repricing done in Jun 9, 2016.
MKS Instruments expects the strategic integration of Newport to aid it launch innovative technologies and generate $35 million worth cost synergies for 2016. The company projects revenues in the range of $370–$410 million and adjusted earnings per share in $0.87-$1.10 per share range for fourth-quarter 2016.
Based on its recently implemented combined targeted operating model, MKS Instruments estimates roughly $1.4 billion revenues in 2016. Annual adjusted earnings are anticipated in the range of $2.97–$2.35 per share. The full-year adjusted operating and gross margins are anticipated in the range of 18–20% and 45–47%, respectively.
MKS INSTRUMENTS Price, Consensus and EPS Surprise
MKS INSTRUMENTS Price, Consensus and EPS Surprise | MKS INSTRUMENTS Quote
Zacks Rank and Other Stocks
MKS Instruments currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks within the industry that warrant a look include:
Applied Optoelectronics, Inc. (AAOI - Free Report) currently sports a Zacks Rank #1 and has an average positive earnings surprise of 91.96% over the four trailing quarters.
Analog Devices, Inc. (ADI - Free Report) currently sports a Zacks Rank #1 and has an average positive earnings surprise of 10.22% over the last four quarters.
Autodesk, Inc. (ADSK - Free Report) currently has a Zacks Rank #1 and has an average positive earnings surprise of 52.38% over the trailing four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>