What happened
Shares of Ultra Clean Holdings (UCTT 1.28%) slumped on Thursday after the supplier of subsystems for the semiconductor and display equipment industries reported mixed fourth-quarter results. Revenue beat expectations, but the bottom line came up slightly short. The company's guidance was also mixed, leading the stock to drop about 7.4% as of 11:45 a.m. EST. It was down as much as 11% earlier in the day.
So what
Ultra Clean reported fourth-quarter revenue of $248.9 million, up 42.6% year over year and $3 million higher than the average analyst estimate. "Our operational flexibility enabled us to increase the amount of UCT's content on our customers' platforms, allowing us to deliver additional value and outpace the broader semiconductor capital equipment market," said CEO Jim Scholhamer.
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Non-GAAP EPS came in at $0.59, up from $0.36 in the prior-year period but $0.01 below analyst expectations. Operating expenses grew at a slower pace than revenue, which helped to push up the bottom line.
Thursday's slump comes after the stock more than doubled in 2017, a move that was driven by rising revenue and profit.
Now what
Ultra Clean expects to produce first-quarter revenue between $275 million and $290 million, up from $205 million in the first quarter of 2017. That guidance is well above analyst expectations of $261.1 million.
The company's earnings guidance wasn't quite as impressive. The company sees non-GAAP EPS coming in between $0.56 and $0.63, mostly below the average analyst estimate of $0.63. This guidance reflects the additional shares issued earlier this year.
On an absolute basis, Ultra Clean put up great numbers. But expectations got ahead of what the company could deliver, leading to today's slump in the stock price.
