MKS Instruments (NASDAQ:) 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 (NASDAQ:) , Perion Network Ltd (NASDAQ:) and CEVA, Inc. (NASDAQ:) , 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.
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