Camtek Ltd (NASDAQ: CAMT) reported Q3 EPS of $0.13, $0.01 worse than the analyst estimate of $0.14. Revenue for the quarter came in at $32.5 million versus the consensus estimate of $32 million.

Highlights of the Third Quarter 2019

• Revenues were at $32.5 million;
• GAAP gross margin at 46.9%; Non-GAAP gross margin at 47.1%;
• GAAP operating income was $4.4 million and non-GAAP operating income was $5.3 million, representing margins of 13.5% and 16.2%, respectively;
• GAAP net income of $4.2 million, or $0.11 per diluted share, and non-GAAP net income of $5.0 million, or $0.13 per diluted share;
• Operating cash flow of $3.8 million with $83.0 million in cash and short-term deposits at quarter-end; and
• Expect fourth quarter revenues at similar levels to that of the third quarter, with improved profitability.

Management Comment

Rafi Amit Camtek's CEO commented, "Camtek's third quarter results reflect continued solid execution, with revenues in the upper limit of our guidance range despite the current weaker semiconductor market. Our gross margin came in below previous quarters mainly as a result of less favorable product mix in the quarter. We expect an improvement in the gross and operating margins in the fourth quarter."

Continued Mr. Amit, "China has grown to become our largest territory and we expect this to continue into next year. Orders have been for various applications including Advanced Packaging and Front-End Macro inspection, as well as new customers opening facilities and purchasing an initial tool, with the potential for further expansion. Since the beginning of the year we have gained 14 new customers, most of them in China. Furthermore, we have strengthened our position in two key market segments: power devices and CMOS image sensors. During the quarter, we received and installed two multiple machine orders for these segments which are expected to continue growing into 2020."

Concluded Mr. Amit, "Fundamental long-term market drivers remain strong, and Camtek continues to maintain its strong position in the market. Next quarter, we expect revenues at around current levels. This should put us at record revenue level for the year of about $133 million."

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