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MKS Instruments' (MKSI) Q2 Earnings Beat, Revenues Miss
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MKS Instruments (MKSI - Free Report) reported second-quarter 2019 adjusted earnings of $1.09 per share, which beat the Zacks Consensus Estimate by a penny but decreased 53.2% year over year.
Revenues of $474.1 million lagged the consensus mark of $487 million and declined 17.3% year over year.
Products revenues (84.6% of total revenues) were $401.3 million, down 21.3% from the year-ago quarter. Services revenues (15.4%) increased 15.3% year over year to $72.8 million.
Shares declined 4.4% to close at $85.13 on Jul 31 following the sluggish results. MKS Instruments has returned 31.7% year to date compared with the industry’s growth of 35.8%.
Year-to-date Performance
Quarter Details
Revenues from semiconductor customers (45.1% of total revenue) decreased 36.4% year over year to $214 million.
Revenues from advanced markets (54.9% of total revenue) were $260.1 million, up 9.9% from the year-ago quarter.
The company’s Vacuum and Analysis segment (49.7% of total revenue) reported revenues of $235.7 million, down 36% year over year primarily due to a slowdown in semiconductor capital equipment spending.
Light and Motion division revenues (38.5% of total revenue) were $182.6 million, down 10.9% year over year.
Equipment & solutions segment revenues were $55.9 million.
Operating Details
In the second quarter, MKS Instruments’ adjusted gross margin contracted 290 basis points (bps) on a year-over-year basis to 45%.
Adjusted EBITDA decreased 41.7% to $103.4 million. Adjusted EBITDA margin was 21.8%, significantly down from 30.9% reported in the year-ago quarter.
Research & development and sales, general & administrative expenses, as a percentage of revenues, expanded 250 bps and 430 bps, respectively.
The company reported non-GAAP operating income of $88.4 million, down 45.5% from the year-ago quarter. Adjusted operating margin was 18.6%, significantly down from 28.3% reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2019, MKS Instruments had cash and cash equivalents of $460 million. Term-loan debt outstanding is $947 million after a payment of $50 million made during the second quarter of 2019.
MKS Instruments also paid a dividend of $10.9 million or 20 cents per diluted share during the reported quarter.
Guidance
For the third quarter of 2019, MKS Instruments anticipates revenues between $415 million and $465 million.
Non-GAAP earnings are expected between 69 cents and $1.02 per share.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments carries a Zacks Rank #5 (Strong Sell).
While Digital Turbine is set to release quarterly results on Aug 5, both CACI International and Cisco Systems are scheduled to report on Aug 14.
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MKS Instruments' (MKSI) Q2 Earnings Beat, Revenues Miss
MKS Instruments (MKSI - Free Report) reported second-quarter 2019 adjusted earnings of $1.09 per share, which beat the Zacks Consensus Estimate by a penny but decreased 53.2% year over year.
Revenues of $474.1 million lagged the consensus mark of $487 million and declined 17.3% year over year.
Products revenues (84.6% of total revenues) were $401.3 million, down 21.3% from the year-ago quarter. Services revenues (15.4%) increased 15.3% year over year to $72.8 million.
Shares declined 4.4% to close at $85.13 on Jul 31 following the sluggish results. MKS Instruments has returned 31.7% year to date compared with the industry’s growth of 35.8%.
Year-to-date Performance
Quarter Details
Revenues from semiconductor customers (45.1% of total revenue) decreased 36.4% year over year to $214 million.
Revenues from advanced markets (54.9% of total revenue) were $260.1 million, up 9.9% from the year-ago quarter.
The company’s Vacuum and Analysis segment (49.7% of total revenue) reported revenues of $235.7 million, down 36% year over year primarily due to a slowdown in semiconductor capital equipment spending.
Light and Motion division revenues (38.5% of total revenue) were $182.6 million, down 10.9% year over year.
Equipment & solutions segment revenues were $55.9 million.
Operating Details
In the second quarter, MKS Instruments’ adjusted gross margin contracted 290 basis points (bps) on a year-over-year basis to 45%.
Adjusted EBITDA decreased 41.7% to $103.4 million. Adjusted EBITDA margin was 21.8%, significantly down from 30.9% reported in the year-ago quarter.
Research & development and sales, general & administrative expenses, as a percentage of revenues, expanded 250 bps and 430 bps, respectively.
The company reported non-GAAP operating income of $88.4 million, down 45.5% from the year-ago quarter. Adjusted operating margin was 18.6%, significantly down from 28.3% reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2019, MKS Instruments had cash and cash equivalents of $460 million. Term-loan debt outstanding is $947 million after a payment of $50 million made during the second quarter of 2019.
MKS Instruments also paid a dividend of $10.9 million or 20 cents per diluted share during the reported quarter.
Guidance
For the third quarter of 2019, MKS Instruments anticipates revenues between $415 million and $465 million.
Non-GAAP earnings are expected between 69 cents and $1.02 per share.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader technology sector include Digital Turbine (APPS - Free Report) , CACI International (CACI - Free Report) and Cisco Systems (CSCO - Free Report) . All three stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While Digital Turbine is set to release quarterly results on Aug 5, both CACI International and Cisco Systems are scheduled to report on Aug 14.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>