The 10-second takeaway
For the quarter ended Dec. 31 (Q4), MKS Instruments beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share dropped significantly. The non-GAAP profit was a surprise, as analysts had predicted a loss.
Margins shrank across the board.
MKS Instruments recorded revenue of $133.8 million. The seven analysts polled by S&P Capital IQ expected to see revenue of $125.2 million on the same basis. GAAP reported sales were 22% lower than the prior-year quarter's $171.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.10. The seven earnings estimates compiled by S&P Capital IQ averaged -$0.01 per share. GAAP EPS of $0.08 for Q4 were 81% lower than the prior-year quarter's $0.42 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 39.3%, 490 basis points worse than the prior-year quarter. Operating margin was 5.2%, 1,230 basis points worse than the prior-year quarter. Net margin was 3.1%, 1,010 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $126.1 million. On the bottom line, the average EPS estimate is $0.04.
Next year's average estimate for revenue is $612.4 million. The average EPS estimate is $0.84.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 176 members out of 183 rating the stock outperform, and seven members rating it underperform. Among 58 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 57 give MKS Instruments a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on MKS Instruments is outperform, with an average price target of $26.43.
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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 position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. 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.