U.S. Markets close in 2 hrs 2 mins

Ultra Clean Holdings (UCTT) Q1 Earnings Miss, Revenues Up Y/Y

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Ultra Clean Holdings UCTT reported first-quarter 2022 adjusted earnings of 95 cents per share, which missed the Zacks Consensus Estimate by 5.94%. However, the figure improved 3.3% year over year.

Revenues of $564.1 million lagged the consensus mark by 0.15%. Yet, the top line increased 35.1% year over year. Ultra Clean’s first-quarter performance has gained from strong demand for semiconductor products and services, led by solid traction in the semiconductor market.

Products revenues (86.3% of total revenues) were $486.8 million, up 40.9% year over year. Services revenues (13.7% of total revenues) increased 7.4% year over year to $77.3 million.

Quarterly Update

Gross profit from the Products business segment (18.2% of product revenues) advanced 40.3% year over year to $88.4 million, courtesy of robust portfolio of diverse offerings and exposure to the fab construction, equipment building and production support ecosystem.

Gross profit from Services Business segment (35.5% of services revenue) was $27.45 million, up 6% year over year.

Total adjusted gross profit margin decreased by 80 bps on a year-over-year basis to 20.5%.

Ultra Clean Holdings, Inc. Price, Consensus and EPS Surprise

Ultra Clean Holdings, Inc. Price, Consensus and EPS Surprise
Ultra Clean Holdings, Inc. Price, Consensus and EPS Surprise

Ultra Clean Holdings, Inc. price-consensus-eps-surprise-chart | Ultra Clean Holdings, Inc. Quote

Operating Details

Research & development expenses, as a percentage of revenues, increased by 20 bps year over year. Also, sales and marketing, and general and administrative expenses, as a percentage of revenues, increased 60 bps and 10 bps respectively on a year-over-year basis.

In the first quarter, adjusted operating income from products business segment increased 22.1% year over year to $49.47 million. However, adjusted operating income margin decreased by 160 bps on a year-over-year basis to 10.2% on account of rising operating expenses and global supply chain challenges in the semiconductor industry.

Adjusted operating income from services business segment increased 18.1% year over year to $12.15 million. Adjusted operating income margin improved by 140 bps on a year-over-year basis to 15.7%.

Total adjusted operating income increased by 21.3% year over year to $61.6 million. However, adjusted operating margin decreased by 120 bps to 10.9%.

Balance Sheet

As of Apr 1, 2022, UCTT had cash and cash equivalent of $367 million compared with $264.2 million as of Mar 26, 2021.

Q2 Guidance

For the second quarter of 2022, UCTT anticipates revenues between $550 million and $630 million. The Zacks Consensus Estimate for revenues is currently pegged at $565.01 million, indicating growth of 35.29% from the year-ago quarter.

Non-GAAP earnings are expected to be between 84 cents and $1.20 per share.

The consensus mark for earnings is currently pegged at $1.01 per share, suggesting an improvement of 9.78% from the prior-year quarter.

Zacks Rank & Stocks to Consider

Currently, Ultra Clean carries a Zacks Rank #4 (Sell).

UCTT shares have underperformed the Zacks Computer & Technology sector in the year-to-date period. While UCTT shares have fallen 42.7%, the Computer & Technology sector has declined 23.2%. Here are some better-ranked stocks worth considering in the broader sector.

Analog Devices ADI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ADI shares have fallen 12.4% in the year-to-date period. ADI is expected to report second-quarter 2022 earnings on May 18.

Cisco Systems CSCO carries a Zacks Rank of 2.

Cisco shares have declined 18.7% in the year-to-date period. Cisco is expected to report third-quarter 2022 earnings on May 18.

BWX Technologies BWXT carries a Zacks Rank of 2.

BWX shares have returned 9.2% in the year-to-date period. BWX is anticipated to report first-quarter 2022 earnings on May 9.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Analog Devices, Inc. (ADI) : Free Stock Analysis Report

Ultra Clean Holdings, Inc. (UCTT) : Free Stock Analysis Report

Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report

BWX Technologies, Inc. (BWXT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research