Veeco Instruments Earnings: Weak Revenue Leads to This Selling

Veeco Instruments Inc. (NASDAQ:VECO) posted a decrease in profit as revenue declined. Veeco Instruments designs and manufactures enabling solutions for customers in the high brightness light emitting diode (HB-LED), solar, data storage, semiconductor, scientific research and industrial markets.

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Veeco Instruments Earnings Cheat Sheet for the Third Quarter

Results: Net income for Veeco Instruments Inc. fell to $13.5 million (34 cents per share) vs. $35.9 million (90 cents per share) a year earlier. This is a decline of 62.5% from the year-earlier quarter.

Revenue: Fell 52.6% to $126.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Veeco Instruments Inc. beat the mean analyst estimate of 32 cents per share. It fell short of the average revenue estimate of $134.3 million.

Quoting Management: John R. Peeler, Veeco’s Chairman and Chief Executive Officer, commented, “Veeco’s third quarter revenue was $127 million, and adjusted EBITA and non-GAAP earnings per share were $17 million and $0.34, in line with our guidance. Veeco generated $46 million in cash flow from operations, ending the quarter with $574 million in cash and short term investments.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 29 cents in the second quarter, by 7 cents in the first quarter, and by 19 cents in the fourth quarter of the last fiscal year.

For four consecutive quarters, revenue has fallen. Revenue declined 48.4% to $136.5 million in the second quarter. The figure fell 45.1% in the first quarter from the year earlier and dropped 36.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

After expanding the quarter before, margins contracted in the second quarter. Gross margin dropped to 42.3%, a 4.3 percentage points decline from the year-earlier quarter. In the first quarter, the figure rose 7.1 percentage points from a year ago to 44.9%.

Net income has dropped 63.6% year-over-year on average across the last five quarters. Performance was hurt by an 89.7% decline in the fourth quarter of the last fiscal year from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from 26 cents a share to 33 cents over the last ninety days. For the fiscal year, the average estimate has moved up from 98 cents a share to $1.45 over the last ninety days.

Competitors to Watch: Applied Materials, Inc., Aixtron AG, CVD Equipment Corporation, Cree, Inc., Intevac, Inc., Amtech Systems, Inc., Zygo Corporation, Canon Inc., MEMC Electronic Materials, Inc., and Novellus Systems, Inc.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)