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Why Shares of Entegris Inc. Jumped Today

By Timothy Green – Jul 27, 2016 at 12:39PM

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The supplier to the semiconductor industry blew past analyst estimates, giving investors a good reason to pile into the stock.

Image source: Entegris.

What: Shares of Entegris (ENTG 0.77%), a provider of yield-enabling products and materials for the semiconductor industry, jumped on Wednesday following the company's second-quarter report. Entegris handily beat analyst estimates on all fronts, driving the stock 10% higher as of noon.

So what: Entegris reported quarterly revenue of $303.1 million, up 8% year over year and about $24 million higher than the average analyst estimate. The critical materials handling segment generated $194.9 million of revenue, growing by 11.8% year over year, while the electronic materials segment grew revenue by 1.6% to $108.2 million.

Non-GAAP EPS came in at $0.28, up from $0.24 during the prior-year period and $0.08 higher than analysts were expecting. On a GAAP basis, EPS was $0.23, up from $0.17 during the same period last year. Higher revenue was the main driver of earnings growth.

Entegris expects to generate between $285 million and $300 million of revenue during the third quarter, along with $0.23 to $0.26 in non-GAAP EPS. During the third quarter of 2015, the company reported $270.3 million of revenue and $0.23 of non-GAAP EPS.

Now what: "I am very pleased with the quality of our execution and the performance of a number of our new products, as we achieved record sales and earnings per share," said CEO Bertrand Loy. He continued:

Our revenue grew 13.5 percent sequentially, reflecting robust demand across our businesses and particular strength in filtration, wafer handling, and specialty materials. We generated a record $71.3 million in adjusted EBITDA, achieving an adjusted EBITDA margin of 23.5 percent. Our strong cash flow allowed us to increase our cash balance at quarter end to $373.7 million while repaying $25.0 million of our long-term debt.

With Entegris easily beating analyst estimates and guiding for continued revenue and earnings growth, it's no surprise investors are pushing the stock higher.

Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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