Shares of Orbotech (NASDAQ: ORBK), a provider of yield enhancement and production solutions for the electronics industry, slumped on Wednesday after the company reported its fourth-quarter results. Orbotech missed analyst estimates for both revenue and earnings, sending the stock down 12% by 11 a.m. EST.
Orbotech reported fourth-quarter revenue of $215 million, up 14.2% year over year but about $4 million below the average analyst estimate. The flat panel display business posted the strongest growth, with revenue increasing 58% year over year to $71.6 million. The printed circuit board business grew at a slower 13.7% rate, producing $77.2 million of revenue. The semiconductor device business was a weak spot, with revenue slumping 11.4% to $62.1 million.
Non-GAAP EPS came in at $0.70, up from $0.54 during the prior-year period but $0.07 short of analyst expectations. This number includes a negative impact from currency translation and hedging losses totaling $4.8 million, or about $0.10 per share.
Orbotech expects to report first-quarter revenue between $180 million and $190 million, compared to revenue of $190 million during the first quarter of 2016.
Orbotech CEO Asher Levy sees positive industry trends propelling the company's results in 2017:
As we enter 2017, we feel encouraged by positive industry trends, such as growth in flexible OLED manufacturing, increased electronic content in smartphones and automobiles and progress in advanced packaging and MEMS. We expect significant revenue contribution from new products launched during 2016.
Orbotech expects its results in 2017 to be more back-end loaded compared to previous years due to the timing of deliveries, which explains the company's lackluster guidance. Orbotech put up solid fourth-quarter numbers on an absolute basis, but fell short of expectations, prompting investors to push the stock price lower.