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Orbotech Ltd. (ORBK) Message Board

  • pajacobsen pajacobsen May 12, 2011 10:25 AM Flag

    Earnings and Earnings Call Summary: A++

    All,

    The quarter's results appear to have been excellent. Net income and revenues were significantly up over 2010, guidance was raised, no impact was seen from the situation in Japan for the quarter, PCB growth is significantly outstripping the (perhaps temporary) weakness in diplays, divesture of the medical imaging business is well on its way, and new business is started in solar.

    From the earnings release, we learned that:

    2011 first quarter:
    * Revenues: $134.2 million, up 34% from last year
    * GAAP net income per share: $0.31 per share (diluted)
    * GAAP net income from continuing operations per share: $0.30 per share (diluted), up from $0.10 last year
    * Non-GAAP net income from continuing operations per share: $0.42 per share (diluted), up from $0.24 last year
    * Operating margin: 11.2%, up from 6.9% last year
    * Operating cash generated from continuing operations: $7.9 million.

    2011 second quarter and full year guidance:
    * Second quarter 2011 revenues: $150 - $160 million
    * 2011 revenues: approximately $560 - 580 million
    * 2011 GAAP net income margin: 10% of revenues, or $1.53 - $1.58 per share (diluted)
    * 2011 Non-GAAP net income margin: 12.5% of revenues, or $1.90 - $2.00 per share (diluted)

    From the earnings call we learned that:

    *No impact was seen from the situation in Japan for the quarter *and* for the second quarter, and no impact was anticipated for the year
    * PCB growth is significantly outstripping the (perhaps temporary) weakness in diplays, and on the display side, the company is helped by its significant stake in the Chinese market
    * Divesture of the medical imaging business is well on its way.
    * A new business is started in solar, in what appears to be a $400 million market
    * DSO looks strong
    * The cash and liabilities situation is very good and the company continues to aggresively retire debt

    Further detail for the divestiture, a management buy-out, was not provided, and in the earnings release it was classified as conditional (although, of course, the consolidated results already has isolated the soon-to-be divested operation out). I did not hear anything about what the terms were for the divestiture, but I have to assume that there is going to be some sort of positive bottom- and top-line impact from the buyout.

    The market reacted positively, with ORBK up almost 10% at 10:15 am, EST. And this was on a broad down day where even NVMI, also a strong performer this quarter, was down.

    Looking only at the results for the quarter and the outlook for the year, I would say that the Orbotech is doing better than it was in its hey-days where the per share price touched the $25 to $30 mark, so all else being equal there is a lot of room for share price growth.

    Best,

    pajacobsen

 
ORBK
16.31+0.15(+0.93%)Jul 30 4:00 PMEDT

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