Shares of ACM Research (ACMR -4.42%), a semiconductor equipment company, were all over the board today after the company reported its third-quarter results. The company's stock initially fell by as much as 13.7% this morning, but later rebounded in the afternoon.
The semiconductor stock was up by 3.2% as of 1:36 p.m. ET.
ACM's lower revenue guidance scared investors
Investors sent ACM's stock on a roller-coaster ride today as they processed the company's latest quarterly results and updated revenue guidance. The company's non-GAAP (adjusted) earnings of $0.57 per share were up 35% from the year-ago quarter and easily surpassed Wall Street's consensus estimate of $0.34 per share.
ACM's sales were also impressive, rising 26% from the year-ago quarter to $168.5 million and were mostly in line with analysts' average consensus estimate of $169 million.
That was the good news, but investors also had their eye on the company's revenue guidance. ACM's management revised its sales guidance for the full year down to a range between $520 million and $540 million, which is lower than the company's previous range of between $515 million and $585 million.
Management said in a press release that it lowered ACM's sales guidance because of "continuing impact from international trade policy" as well as "spending scenarios" from key customers and supply chain constraints.
Not only is ACM's full-year revenue guidance range lower than before, but it also means that the full-year revenue midpoint of a guidance is now $530 million -- far below Wall Street's consensus estimate of $557 million.
ACM investors shouldn't worry yet
By most metrics, ACM had a great quarter. Both revenue and earnings grew quickly and outpaced expectations. Additionally, the company's gross margin increased from 49.4% in the year-ago quarter to 52.9%.
It's not great to see the company lower its sales guidance, but in light of the strong quarter it may not be too much to worry about right now. Instead, investors should keep a close eye on the company's full-year sales to see if there's any further indication that outside factors are slowing revenue down.
