FormFactor Inc. (NASDAQ:FORM) reported fourth-quarter adjusted earnings of 31 cents per share, beating the Zacks Consensus Estimate by 5 cents. Moreover, the reported earnings increased 19% sequentially and 29% year over year.
Revenues increased 6.8% from the year-ago quarter and 4.4% sequentially to $140.9 million. Also, the top line beat the Zacks Consensus Estimate of $136 million. In addition, the figure was slightly above the company’s guided range of $132-$140 million.
Quarter Details
Probe card segment revenues were $116.2 million in the fourth quarter, up 4.1% from the last reported quarter.
Within the probe card segment, Foundry & Logic sales (accounting for 54% of its total revenues) increased 25% on a sequential basis to $76.7 million.
Revenues for DRAM products (21% of revenues) were $29.6 million, down sequentially.
Flash revenues were $9.9 million, down on a sequential basis. Almost $5.8million of the flash revenues were from NAND flash applications.
Systems revenues in the fourth quarter were $24.7 million, up 5.8% sequentially.
Operating Details
On a non-GAAP basis, gross margin expanded 230 basis points (bps) year over year and 40 bps sequentially to 44.1%. The increase was primarily due to a favorable product mix.
Non-GAAP operating expenses were $37.2 million in the fourth quarter, down $0.3 million from the last reported quarter. The decrease was due to employee-related costs, including lower performance-based compensation, coupled with benefits and disciplined spending.
Balance Sheet & Cash Flow
At the end of the fourth quarter, cash and cash equivalents as well as marketable securities were $149.0 million compared with $142.1 million in the last reported quarter.
Free cash flow was $15.8 million, up from $13 million in the last reported quarter.
Guidance
FormFactor expects first-quarter 2019 revenues between $127 million and $135 million. The Zacks Consensus Estimate for revenues is currently pegged at $130.0 million.
On a non-GAAP basis, the company projects gross margin within 41-44% and earnings in the band of 15-21 cents per share. The Zacks Consensus Estimate for earnings is pegged at 19 cents.
Zacks Rank & Stocks to Consider
Currently, Formfactor carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader technology sector are Twitter (NYSE:TWTR) , AMETEK, Inc. (NYSE:AME) and Inphi Corporation (NYSE:IPHI) . While Twitter sports a Zacks #1 Rank (Strong Buy), AMETEK and Inphi both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Twitter, AMETEK and Inphi is projected to be 11.5%, 9.58% and 18.5%, respectively.
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