MKS Instruments reported strong results in third-quarter 2014. Adjusted earnings came in at $0.43, surpassing the Zacks Consensus Estimate by 16.2%. Net sales achieved a 12.2% year over year improvement on growing semiconductor market demand. The company had also lowered its operating expenses through specialized cost-reduction plans. Besides, it has raised its future outlook on expectations of benefits from new innovations and strategic growth initiatives. However external market uncertainties still remain as potential risk factors for the company's foreign operations. Moreover, severe threats of market rivalry and highly concentrated demand are two major issues faced by MKS Instruments. Based on such factors, we prefer to maintain a Neutral recommendation over the stock.
Massachusetts-based MKS Instruments, Inc. (MKSI) provides instruments, subsystems and process-control solutions required to measure, control, power, monitor and analyze parameters of manufacturing processes, and also helps to improve process performance and productivity. Alongside, the company provides software maintenance, installation services and repair and maintenance of its own products as well as training services. The company operates in four segments, which are discussed below:
The Advanced Manufacturing Capital Equipment segment sells products related to semiconductor processing and other similar advanced manufacturing processes. This segment includes the development, manufacture, sales and servicing of instruments and control products, power and reactive gas products, materials delivery products and vacuum products.
The Analytical Solutions Group segment includes gas-composition analysis, information technology products and custom-fabrication services.
The Europe Region Sales & Service and the Asia Region Sales & Service segments handle the resale and service of the above segments' products in Europe and Asia, respectively.
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