On Feb. 12, Veeco Instruments
Fourth-quarter revenues totaled $123 million, up 9% from the previous year. Net income jumped sharply to $7.6 million, or $0.24 per share, from $2.7 million, or $0.09 per share, the year before. For the full year, revenue reached $441 million, an 8% increase from 2005. Net income for the full year climbed into positive territory, reaching $14.9 million or $0.48 per share.
Unfortunately, Veeco sees a slowdown on the horizon, expecting revenue during the current quarter to fall to between $95 million and $105 million, with earnings per share coming in anywhere between a $0.10 loss and a $0.03 gain. Analysts were expecting $122 million in revenue and $0.24 in earnings per share for the quarter, so this is a considerable shortfall.
Veeco's sales in the just-completed quarter were driven by its LED/wireless customers, as well as strong sales of its scientific research products. Sales to data-storage customers were weak, because these customers -- including Seagate
Another trend that bodes well for Veeco, in my opinion, is the yield problems that semiconductor manufacturers are having with the transition to the 65 nm node. During KLA-Tencor's
Despite what I see as favorable trends, I'm certainly aware that the semiconductor markets are highly cyclical. Veeco's first-quarter guidance is significantly disappointing, and I'm always a bit leery when management claims that business will pick up a few months down the road. Veeco looks like a risky stock to own, and investors with no taste for volatility should definitely look elsewhere.
Semiconduct yourself to further Foolishness:
- Five Stars for Veeco Instruments: Fool by Numbers
- Veeco's Small Setback
- Applied Materials Rides the Memory Wave
- KLA-Tencor Cleans Up: Fool by Numbers
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Fool contributor Dan Bloom and his wife own shares in Veeco, Seagate, and KLA-Tencor. If you have a crystal ball, he would appreciate you sharing any insights it might have into Veeco. The Fool has a disclosure policy.