MKS Instruments (MKSI) Tops Q1 EPS by 30c, Revenues Beat; Provides 2Q EPS/Revenue Outlook

MKS Instruments (NASDAQ: MKSI) reported Q1 EPS of $1.54, $0.30 better than the analyst estimate of $1.24. Revenue for the quarter came in at $536 million versus the consensus estimate of $508.65 million.

• Quarterly revenue of $536 million, up 7% sequentially and up 16% year-over-year
• Quarterly Non-GAAP net earnings of $85 million, or $1.54 per diluted share
• Quarterly GAAP net income of $69 million, or $1.25 per diluted share

“I could not be more proud of the dedication, resilience and hard work of the MKS team during such a challenging time,” said John TC Lee, President and Chief Executive Officer. “From the onset of the global COVID-19 crisis, our team took swift action to ensure the safety and well-being of our global workforce – which remains our top priority. We also remained steadfast in delivering on our customer commitments and overcoming the disruptions across our factories and global supply chain.”

Mr. Lee added, “Our first quarter outlook did not factor in any disruptions from the COVID-19 pandemic, and yet we were still able to deliver quarterly revenue at the high-end of our guidance range. This is a testament to our broad and differentiated portfolio, the diverse and essential markets we serve, and our world-class operational execution. Order rates remain strong in the second quarter; however, the impact of shelter-in-place directives at our facilities and those of our suppliers around the world are expected to impact our second quarter revenue. We remain excited about the long-term opportunity in the markets we serve, and our role as a critical technology enabler.”

“Our top-line growth exceeded our expectations, driven by strong sequential revenue growth of 15% in our Semiconductor Market, while revenue in our Advanced Markets declined a modest 2%. Excluding our Research market, which was negatively impacted by university and research lab closures caused by COVID-19, our Advanced Markets revenue would have grown sequentially,” said Seth H. Bagshaw, Senior Vice President and Chief Financial Officer.

Mr. Bagshaw added, “Our balance sheet and liquidity position remain strong. We ended the quarter with cash and short-term investments of $503 million, which reflects the previously announced $50 million voluntary debt prepayment on January 24th, and our net leverage ratio exiting the quarter reduced further to 0.8 times. Moreover, we have an additional $100 million available to us under an asset backed line of credit, subject to certain borrowing base requirements.”

GUIDANCE:

MKS Instruments sees Q2 2020 EPS of $0.90-$1.38, versus the consensus of $1.24. MKS Instruments sees Q2 2020 revenue of $450-520 million, versus the consensus of $500 million.

• Based on current business levels, the Company expects that revenue in the second quarter of 2020 could range from $450 million to $520 million. At these volumes, GAAP net income could range from $0.62 to $1.10 per diluted share and non-GAAP net earnings could range from $0.90 to $1.38 per diluted share.

For earnings history and earnings-related data on MKS Instruments (MKSI) click here.

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