In response to favorable third-quarter results and upbeat guidance, shares of FormFactor (FORM), a maker of specialty equipment used to manufacture semiconductors, were up 23% as of 10:40 a.m. EDT on Thursday.
Here's a look at the key numbers from the quarter:
- Revenue dropped 6% to $135 million. While that's not good in absolute terms, it was slightly ahead of what Wall Street was expecting.
- Non-GAAP net income was $19.6 million, or $0.26 per share. These numbers were both down more than 20% year over year, but they also were ahead of the consensus estimate among analysts.
Turning to guidance, here's what management expects in the upcoming quarter:
- Revenue is expected to land between $132 million and $140 million. This range would represent year-over-year growth of 3% at the midpoint. It's also higher than the $131.9 million that Wall Street was expecting.
- Non-GAAP EPS is expected to land between $0.23 and $0.29. The midpoint of this range represents year-over-year growth of 8%. It's also nicely higher than the $0.23 in EPS that analysts had modeled.
Given the better-than-expected results, favorable guidance, and the fact that FormFactor's stock was down more than 20% since the start of the year, it isn't hard to figure out why bulls are having a good day.
It's great to see that FormFactor is projecting a return to growth, but this company operates in a very tough industry, and its results will always wax and wane with customer buying patterns. For that reason, I'm content to look elsewhere for more promising investment opportunities.