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MKS Instruments (MKSI - Free Report) reported fourth-quarter 2019 adjusted earnings of $1.20 per share, which beat the Zacks Consensus Estimate by 13.2% but slumped 22.1% year over year. The decline was primarily due to lower operating margin.
Revenues of $499.7 million beat the consensus mark by 5.9% and increased 8.5% year over year, driven by increased demand in the semiconductor market.
Products revenues (85.4% of total revenues) were $426.5 million, up 6% from the year-ago quarter. Services revenues (14.6%) increased 25.8% year over year to $73.2 million.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
Revenues from the semiconductor market (54.3% of total revenues) increased 15.7% year over year to $271.4 million.
Revenues from advanced markets (45.7% of total revenues) were $228.3 million, up 1% from the year-ago quarter.
Segment-wise, Vacuum and Analysis (56% of total revenues) revenues were $279.8 million, up 8.4% year over year.
Light and Motion division revenues (35.3% of total revenues) were $176.5 million, down 12.8% year over year.
Equipment & Solutions segment revenues (8.7% of total revenues) were $43.3 million.
Operating Details
In the fourth quarter, MKS Instruments’ adjusted gross margin contracted 230 basis points (bps) on a year-over-year basis to 43.3%.
Adjusted EBITDA decreased 12.2% year over year to $107.9 million. Adjusted EBITDA margin was 21.6%, significantly down from 26.7% reported in the year-ago quarter.
Research & development and sales, general & administrative expenses, as a percentage of revenues, expanded 130 bps and 170 bps, respectively.
MKS Instruments reported non-GAAP operating income of $92.1 million, down 15.7% year over year. Adjusted operating margin was 18.4%, down from 26.7% reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2019, MKS Instruments had cash and short-term investments of 524 million compared with $475 million as of Sep 30, 2019.
Secured term-loan debt outstanding as of Dec 31 was $892 million.
MKS Instruments paid out dividends worth $11 million during the reported quarter.
First-Quarter Guidance
For the first quarter of 2020, MKS Instruments anticipates revenues between $495 million and $545 million.
The Zacks Consensus Estimate is currently pegged at $488.5 million, indicating growth of 5.4% from the figure reported in the year-ago quarter.
Non-GAAP earnings are expected between $1.14 and $1.49 per share.
The consensus mark for earnings is currently pegged at $1.28, suggesting an increase of 14.3% from the figure reported in the year-ago quarter.
Zacks Rank & Other Stocks to Consider
Currently, MKS Instruments sports a Zacks Rank #1 (Strong Buy).
Advanced Energy Industries, Perion and CEVA are set to report quarterly results on Feb 3, 12 and 18, respectively.
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MKS Instruments' (MKSI) Q4 Earnings Beat, Revenues Rise Y/Y
MKS Instruments (MKSI - Free Report) reported fourth-quarter 2019 adjusted earnings of $1.20 per share, which beat the Zacks Consensus Estimate by 13.2% but slumped 22.1% year over year. The decline was primarily due to lower operating margin.
Revenues of $499.7 million beat the consensus mark by 5.9% and increased 8.5% year over year, driven by increased demand in the semiconductor market.
Products revenues (85.4% of total revenues) were $426.5 million, up 6% from the year-ago quarter. Services revenues (14.6%) increased 25.8% year over year to $73.2 million.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
MKS Instruments, Inc. price-consensus-eps-surprise-chart | MKS Instruments, Inc. Quote
Quarter Details
Revenues from the semiconductor market (54.3% of total revenues) increased 15.7% year over year to $271.4 million.
Revenues from advanced markets (45.7% of total revenues) were $228.3 million, up 1% from the year-ago quarter.
Segment-wise, Vacuum and Analysis (56% of total revenues) revenues were $279.8 million, up 8.4% year over year.
Light and Motion division revenues (35.3% of total revenues) were $176.5 million, down 12.8% year over year.
Equipment & Solutions segment revenues (8.7% of total revenues) were $43.3 million.
Operating Details
In the fourth quarter, MKS Instruments’ adjusted gross margin contracted 230 basis points (bps) on a year-over-year basis to 43.3%.
Adjusted EBITDA decreased 12.2% year over year to $107.9 million. Adjusted EBITDA margin was 21.6%, significantly down from 26.7% reported in the year-ago quarter.
Research & development and sales, general & administrative expenses, as a percentage of revenues, expanded 130 bps and 170 bps, respectively.
MKS Instruments reported non-GAAP operating income of $92.1 million, down 15.7% year over year. Adjusted operating margin was 18.4%, down from 26.7% reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2019, MKS Instruments had cash and short-term investments of 524 million compared with $475 million as of Sep 30, 2019.
Secured term-loan debt outstanding as of Dec 31 was $892 million.
MKS Instruments paid out dividends worth $11 million during the reported quarter.
First-Quarter Guidance
For the first quarter of 2020, MKS Instruments anticipates revenues between $495 million and $545 million.
The Zacks Consensus Estimate is currently pegged at $488.5 million, indicating growth of 5.4% from the figure reported in the year-ago quarter.
Non-GAAP earnings are expected between $1.14 and $1.49 per share.
The consensus mark for earnings is currently pegged at $1.28, suggesting an increase of 14.3% from the figure reported in the year-ago quarter.
Zacks Rank & Other Stocks to Consider
Currently, MKS Instruments sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader technology sector include Advanced Energy Industries (AEIS - Free Report) , Perion Network Ltd (PERI - Free Report) and CEVA, Inc. (CEVA - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Advanced Energy Industries, Perion and CEVA are set to report quarterly results on Feb 3, 12 and 18, respectively.
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>>