What happened

Shares of Ultra Clean Holdings (UCTT -2.24%) have gotten crushed today, down by 13% at 11:30 a.m. EDT, after the company reported second-quarter earnings. The results topped market expectations, but investors may be fretting over a structural change to a joint venture (JV).

So what

Revenue in the second quarter was $515.2 million, ahead of the consensus estimate of $505.4 million in sales. That resulted in adjusted net income of $43.7 million, or $0.99 per share, while analysts were modeling for just $0.97 per share in adjusted profits. The company, which supplies equipment to the semiconductor industry, reported an adjusted operating margin of 11.7%.

Red stock chart going down

Image source: Getty Images.

"UCT delivered strong second quarter results driven by disciplined execution in a robust demand environment across all of our end markets," CEO Jim Scholhamer commented in a release. "These results demonstrate that UCT's diversified suite of capabilities and ability to deliver are enabling us to play a larger, more valuable role in the semiconductor ecosystem."

Now what

Ultra Clean's outlook was also strong, with revenue in the third quarter expected to be in the range of $520 million to $560 million, compared to the consensus estimate of $516.6 million in sales. The company is forecasting adjusted earnings per share of $0.94 to $1.10, while Wall Street is looking for $1 per share in adjusted profits.

Ultra Clean has a services JV in Korea and recently adjusted its agreement to purchase more shares of the JV. The change will have no impact on revenue or operating margins, but could dilute earnings per share going forward, CFO Sheri Savage noted on the conference call with analysts.