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Reflecting On Semiconductor Manufacturing Stocks’ Q1 Earnings: Entegris (NASDAQ:ENTG)


Petr Huřťák /
2024/07/09 3:36 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Entegris (NASDAQ:ENTG) and its peers.

The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.

The 14 semiconductor manufacturing stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 1.3%. while next quarter's revenue guidance was in line with consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, but semiconductor manufacturing stocks have performed well, with the share prices up 18.4% on average since the previous earnings results.

Entegris (NASDAQ:ENTG)

With fabs representing the company’s largest customer type, Entegris (NASDAQ:ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.

Entegris reported revenues of $771 million, down 16.4% year on year, falling short of analysts' expectations by 0.1%. It was a mixed quarter for the company, with an impressive beat of analysts' EPS estimates but underwhelming revenue guidance for the next quarter.

Bertrand Loy, Entegris’ president and chief executive officer, said: “We are pleased with our positive start to the year. Sales of $771 million were at the high end of our guidance. Adjusted EBITDA and non-GAAP EPS were above our guidance, even while we increased critical R&D investments. During the quarter, we sold the Pipeline and Industrial Materials (PIM) business, completing all our planned divestitures of non-core assets. Using the PIM sale proceeds and cash on hand, we paid down over $400 million of debt during the quarter.”

Entegris Total Revenue

The stock is up 7% since the results and currently trades at $142.2.

Read our full report on Entegris here, it's free.

Best Q1: Lam Research (NASDAQ:LRCX)

Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.

Lam Research reported revenues of $3.79 billion, down 2% year on year, outperforming analysts' expectations by 1.7%. It was a strong quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.

Lam Research Total Revenue

The stock is up 24.9% since the results and currently trades at $1,104.48.

Is now the time to buy Lam Research? Access our full analysis of the earnings results here, it's free.

Kulicke and Soffa (NASDAQ:KLIC)

Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices

Kulicke and Soffa reported revenues of $172.1 million, down 0.5% year on year, falling short of analysts' expectations by 1.2%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.

The stock is up 9.6% since the results and currently trades at $48.52.

Read our full analysis of Kulicke and Soffa's results here.

IPG Photonics (NASDAQ:IPGP)

Both a designer and manufacturer of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.

IPG Photonics reported revenues of $252 million, down 27.4% year on year, falling short of analysts' expectations by 0.7%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.

IPG Photonics had the slowest revenue growth among its peers. The stock is down 3.5% since the results and currently trades at $85.46.

Read our full, actionable report on IPG Photonics here, it's free.

Applied Materials (NASDAQ:AMAT)

Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.

Applied Materials reported revenues of $6.65 billion, flat year on year, surpassing analysts' expectations by 1.7%. It was a good quarter for the company, with a solid beat of analysts' EPS estimates and in-line revenue guidance for the next quarter.

The stock is up 15.5% since the results and currently trades at $247.38.

Read our full, actionable report on Applied Materials here, it's free.

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