MKS Instruments (MKSI) Q1 Earnings Top Estimates, Revenues Up
MKS Instruments MKSI reported first-quarter 2023 adjusted earnings of 48 cents per share, beating the Zacks Consensus Estimate by 271.43% but declining 82.3% year over year.
Revenues of $794 million miss the consensus mark by 0.12% and increased 7% year over year.
Products revenues (89.7% of total revenues) were $712 million, up 9.9% year over year. Services revenues (10.3% of total revenues) decreased 12.8% to $82 million.
Quarterly Update
Revenues from the semiconductor market (38.9% of total revenues) declined 36.7% year over year to $309 million. Top-line growth was affected by continued supply chain constraints and challenging macroeconomic environment.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
MKS Instruments, Inc. price-consensus-eps-surprise-chart | MKS Instruments, Inc. Quote
Electronics & Packaging revenues (28% of total revenues) were $222 million, higher than $60 million reported in the year-over-year quarter.
Specialty Industrial revenues (33.1% of total revenues) increased 35.6% year over year to $263 million.
Operating Details
In the first quarter, the adjusted gross margin contracted 280 basis points (bps) on a year-over-year basis to 42.2%.
Adjusted EBITDA fell 32.7% year over year to $142 million. Adjusted EBITDA margin contracted 1060 bps on a year-over-year basis to 17.8%.
Research & development and sales, general & administrative expenses, as a percentage of revenues, surged 210 bps and 950 bps on a year-over-year basis, respectively.
MKS Instruments reported a non-GAAP operating income of $96 million, down 49.5% year over year. The adjusted operating margin contracted 1350 bps on a year-over-year basis to 12.1%.
Balance Sheet
As of Mar 31, 2023, MKS Instruments had cash and cash equivalents of $880 million compared with $909 million as of Dec 31, 2022.
Cash flow from operations was $37 million in the first quarter compared with the fourth-quarter 2022 figure of $184 million.
Free cash flow was $20 million compared with $130 million reported in the previous quarter.
In the first quarter, the company paid a cash dividend of $15 million or 22 cents per share.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments has a Zacks Rank #3 (Hold).
MKSI shares have declined 2.6% against the Zacks Computer and Technology sector’s rise of 18.9% year to date.
BigBear.ai BBAI, Audioeye AEYE, and Phunware PHUN are some better-ranked stocks that investors can consider in the broader sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BigBear.ai shares have gained 285.9% year to date. BBAI is set to report its first-quarter 2023 results on May 9.
Audioeye shares have gained 68.4% year to date. AEYE is set to report its first-quarter 2023 results on May 10.
Phunware shares have declined 24.5% year to date. PHUN is set to report its first-quarter 2023 results on May 11.
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