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Revenues of $742 million surpassed the consensus mark by 2.9% and increased 25.8% year over year, driven by buoyant demand for the company’s solutions in the semiconductor and advanced market.
Products revenues (87.5% of total revenues) were $649.1 million, up 28.1% year over year. Services revenues (12.5%) increased 11.8% year over year to $92.8 million.
Quarterly Update
Revenues from the semiconductor market (65.8% of total revenues) increased 35.9% year over year to $487.9 million, owing to robust performance by the Vacuum & Analysis division.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
Revenues from advanced markets (34.2% of total revenues) were $254.1 million, up 10.1% year over year. The upside can be attributed to recovery in demand trends for Advanced Electronics applications.
Segment-wise, Vacuum and Analysis (65.1% of total revenues) revenues surged 33.7% year over year to $483.1 million.
Light and Motion division revenues (28.1% of total revenues) increased 18.7% year over year to $208.7 million.
Equipment & Solutions segment revenues (6.8% of total revenues) were $50.2 million, down 4.6% year over year.
Operating Details
In the third quarter, adjusted gross margin expanded 190 basis points (bps) on a year-over-year basis to 47%.
Adjusted EBITDA increased 44.6% year over year to $222 million. Adjusted EBITDA margin expanded 390 bps on a year-over-year basis to 29.9%.
Research & development, and sales, general & administrative expenses, as a percentage of revenues, declined 20 bps and 180 bps on a year-over-year basis, respectively.
MKS Instruments reported non-GAAP operating income of $200.9 million, up 47.3% year over year. Adjusted operating margin expanded 400 bps on a year-over-year basis to 27.1%.
Balance Sheet
As of Sep 30, 2021, MKS Instruments had cash and short-term investments of $879.6 million compared with $1.04 billion as of Jun 30, 2021.
Total debt as of Sep 30, 2021, was $818.7 million. Secured term loan principal outstanding as of Sep 30, 2021, was $827 million. The company also had $100 million of incremental borrowing capacity under an asset-based line of credit, subject to certain borrowing base requirements.
Cash flow from operations was $153.1 million in the second quarter compared with the previous quarter’s figure of $165.2 million. Free cash flow was $132.6 million compared with $148.9 million reported in the previous quarter.
MKS Instruments paid out dividends worth $12 million during the reported quarter.
Q4 Guidance
For the fourth quarter of 2021, MKS Instruments anticipates revenues to be $760 million (+/- $30 million). The Zacks Consensus Estimate for revenues is currently pegged at $738 million, indicating growth of 11.8% from the figure reported in the year-ago quarter.
Non-GAAP earnings are expected to be $2.85 per share (+/- 26 cents).
The consensus mark for earnings is currently pegged at $2.87 per share, suggesting an increase of 22.7% from the figure reported in the year-ago quarter.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments has a Zacks Rank #3 (Hold).
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MKS Instruments (MKSI) Q3 Earnings Top Estimates, Revenues Up
MKS Instruments (MKSI - Free Report) reported third-quarter 2021 adjusted earnings of $2.79 per share, which beat the Zacks Consensus Estimate by 1.5% and surged 44.6% year over year.
Revenues of $742 million surpassed the consensus mark by 2.9% and increased 25.8% year over year, driven by buoyant demand for the company’s solutions in the semiconductor and advanced market.
Products revenues (87.5% of total revenues) were $649.1 million, up 28.1% year over year. Services revenues (12.5%) increased 11.8% year over year to $92.8 million.
Quarterly Update
Revenues from the semiconductor market (65.8% of total revenues) increased 35.9% year over year to $487.9 million, owing to robust performance by the Vacuum & Analysis division.
MKS Instruments, Inc. Price, Consensus and EPS Surprise
MKS Instruments, Inc. price-consensus-eps-surprise-chart | MKS Instruments, Inc. Quote
Revenues from advanced markets (34.2% of total revenues) were $254.1 million, up 10.1% year over year. The upside can be attributed to recovery in demand trends for Advanced Electronics applications.
Segment-wise, Vacuum and Analysis (65.1% of total revenues) revenues surged 33.7% year over year to $483.1 million.
Light and Motion division revenues (28.1% of total revenues) increased 18.7% year over year to $208.7 million.
Equipment & Solutions segment revenues (6.8% of total revenues) were $50.2 million, down 4.6% year over year.
Operating Details
In the third quarter, adjusted gross margin expanded 190 basis points (bps) on a year-over-year basis to 47%.
Adjusted EBITDA increased 44.6% year over year to $222 million. Adjusted EBITDA margin expanded 390 bps on a year-over-year basis to 29.9%.
Research & development, and sales, general & administrative expenses, as a percentage of revenues, declined 20 bps and 180 bps on a year-over-year basis, respectively.
MKS Instruments reported non-GAAP operating income of $200.9 million, up 47.3% year over year. Adjusted operating margin expanded 400 bps on a year-over-year basis to 27.1%.
Balance Sheet
As of Sep 30, 2021, MKS Instruments had cash and short-term investments of $879.6 million compared with $1.04 billion as of Jun 30, 2021.
Total debt as of Sep 30, 2021, was $818.7 million. Secured term loan principal outstanding as of Sep 30, 2021, was $827 million. The company also had $100 million of incremental borrowing capacity under an asset-based line of credit, subject to certain borrowing base requirements.
Cash flow from operations was $153.1 million in the second quarter compared with the previous quarter’s figure of $165.2 million. Free cash flow was $132.6 million compared with $148.9 million reported in the previous quarter.
MKS Instruments paid out dividends worth $12 million during the reported quarter.
Q4 Guidance
For the fourth quarter of 2021, MKS Instruments anticipates revenues to be $760 million (+/- $30 million). The Zacks Consensus Estimate for revenues is currently pegged at $738 million, indicating growth of 11.8% from the figure reported in the year-ago quarter.
Non-GAAP earnings are expected to be $2.85 per share (+/- 26 cents).
The consensus mark for earnings is currently pegged at $2.87 per share, suggesting an increase of 22.7% from the figure reported in the year-ago quarter.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Apple (AAPL - Free Report) , Trimble (TRMB - Free Report) and Cognex (CGNX - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apple, Trimble and Cognex are set to report their quarterly earnings on Oct 28, Nov 3 and Nov 4.