MKS Instruments MKSI reported adjusted earnings of $1.53 per share in second-quarter 2024, up from the year-ago quarter’s earnings of $1.32 per share. The figure beat the Zacks Consensus Estimate by 50%.
Revenues of $887 million beat the consensus mark by 2.73% but declined 11.6% year over year.
Products revenues (86.8% of total revenues) were $770 million, down 13% year over year.
Services revenues (13.2% of total revenues) dropped 0.8% year over year to $117 million.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
MKS Instruments, Inc. price-consensus-eps-surprise-chart | MKS Instruments, Inc. Quote
Quarterly Update
Revenues from the Semiconductor market (41.6% of total revenues) fell 16.3% year over year to $369 million. The figure beat the Zacks Consensus Estimate by 7.62%.
Electronics & Packaging revenues (25.8% of total revenues) were $229 million, higher than $225 million reported in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 6.55%.
Specialty Industrial revenues (32.6% of total revenues) declined 14.2% year over year to $289 million. The figure missed the Zacks Consensus Estimate by 5.97%.
Operating Details
In the second quarter, the adjusted gross margin expanded 40 basis points (bps) on a year-over-year basis to 47.2%.
Research & development, as a percentage of revenues, was flat year over year. Sales, general & administrative expenses, as a percentage of revenues, contracted 100 bps on a year-over-year basis.
MKS Instruments reported a non-GAAP operating income of $192 million, down 15.4% year over year. The adjusted operating margin contracted 100 bps year over year to 21.6%.
Adjusted EBITDA was down 14% year over year to $228 million. Adjusted EBITDA margin fell 70 bps on a year-over-year basis to 25.7%.
Balance Sheet
As of Jun 30, 2024, MKS Instruments had cash and cash equivalents of $850 million compared with $845 million as of Mar 31, 2024.
Cash flow from operations was $122 million in second-quarter 2024 compared with the first-quarter 2024 figure of $67 million.
Free cash flow was $96 million compared with $49 million reported in the previous quarter.
In the second quarter, the company paid a cash dividend of $15 million or 22 cents per share.
Guidance
MKSI expects third-quarter 2024 revenues of $870 million (+/- $40 million).
The company expects an Adjusted EBITDA of $206 million (+/- 23 million).
On a non-GAAP basis, MKSI expects earnings of $1.43 (+/- 28 cents) per share.
Zacks Rank & Other Stocks to Consider
Currently, MKSI flaunts a Zacks Rank #1 (Strong Buy).
MKSI’s shares have inched up 1.7% year to date compared with the Zacks Computer & Technology sector’s increase of 11.5%.
Here are some top-ranked stocks worth considering in the broader sector.
Some better-ranked stocks from the broader Computer and Technology sector are Bilibili BILI, Cisco Systems CSCO and Applied Materials AMAT each carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bilibili’s shares have surged 23% year to date. BILI is set to report second-quarter 2024 results on Aug 22.
Cisco Systems shares have plunged 10.6% year to date. CSCO is set to post fourth-quarter fiscal 2024 results on Aug 14.
Applied Materials shares have gained 20.6% year to date. AMAT is set to release third-quarter fiscal 2024 results on Aug 15.
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