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FormFactor (FORM) Beats Earnings & Revenue Estimates in Q4

FormFactor Inc.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 las t report ed 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.

FormFactor, Inc. Price, Consensus and EPS Surprise

FormFactor, Inc. Price, Consensus and EPS Surprise | FormFactor, Inc. Quote

Zacks Rank & Stocks to Consider

Currently, Formfactor carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader technology sector are Twitter TWTR , AMETEK, Inc. AME and Inphi Corporation 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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