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Veeco Instruments Beats Estimates But Has a Big Earnings Drop

By Seth Jayson – Updated Apr 7, 2017 at 12:14PM

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Just the facts, Fool.

Veeco Instruments (Nasdaq: VECO) reported earnings on Oct. 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Veeco Instruments missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
Veeco Instruments reported revenue of $126.9 million. The 19 analysts polled by S&P Capital IQ foresaw a top line of $130.5 million on the same basis. GAAP reported sales were 53% lower than the prior-year quarter's $268.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.34. The 18 earnings estimates compiled by S&P Capital IQ forecast $0.31 per share. GAAP EPS of $0.34 for Q3 were 62% lower than the prior-year quarter's $0.89 per share. (The prior-year quarter included -$0.42 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 42.3%, 430 basis points worse than the prior-year quarter. Operating margin was 9.4%, 1,820 basis points worse than the prior-year quarter. Net margin was 10.6%, 280 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $132.6 million. On the bottom line, the average EPS estimate is $0.34.

Next year's average estimate for revenue is $539.9 million. The average EPS estimate is $1.52.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 399 members out of 430 rating the stock outperform, and 31 members rating it underperform. Among 77 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 69 give Veeco Instruments a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Veeco Instruments is hold, with an average price target of $35.80.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Veeco Instruments Stock Quote
Veeco Instruments
$19.16 (1.54%) $0.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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