Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q2 now behind us, let’s have a look at FormFactor (NASDAQ:FORM) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers and data storage. The growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a slower Q2; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 0.06% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021 and while some of the semiconductor manufacturing stocks have fared somewhat better than others, they have not been spared, with share prices declining 8.77% since the previous earnings results, on average.
With customers across the foundry and fabless markets, FormFactor (NASDAQ:FORM) is a US-based provider of test and measurement technologies for semiconductors.
FormFactor reported revenues of $155.9 million, down 23.5% year on year, missing analyst expectations by 3.94%. It was a weak quarter for the company, with a miss of analysts' revenue estimates and a decline in its operating margin.
“As we navigate the current cyclical downturn, we continue to benefit from FormFactor’s diversification strategy and broad Lab-to-Fab product portfolio, which differentiate us from our direct competitors,” said Mike Slessor, CEO of FormFactor,
The stock is down 10.4% since the results and currently trades at $32.23.
Best Q2: Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.43 billion, down 1.46% year on year, beating analyst expectations by 4.29%. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates and optimistic revenue guidance for the next quarter.
Applied Materials scored the strongest analyst estimates beat among its peers. The stock is up 6.3% since the results and currently trades at $146.06.
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Weakest Q2: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of most of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers that are used for cutting, welding and processing raw materials.
IPG Photonics reported revenues of $340 million, down 9.83% year on year, missing analyst expectations by 1.79%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
The stock is down 24.2% since the results and currently trades at $99.71.
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 $901 million, up 30.1% year on year, beating analyst expectations by 1.6%. It was a mixed quarter for the company, with an improvement in inventory levels but underwhelming revenue guidance for the next quarter and a decline in its operating margin.
The stock is down 7.81% since the results and currently trades at $95.5.
Focusing on Silicon Carbide and Power Semiconductor sectors, Amtech Systems (NASDAQ:ASYS) produces machinery and related chemicals needed for manufacturing semiconductors.
Amtech reported revenues of $30.7 million, up 54% year on year, missing analyst expectations by 6.42%. It was a weak quarter for the company, with a miss of analysts' revenue estimates and a decline in its operating margin.
Amtech pulled off the fastest revenue growth but had the weakest performance against analyst estimates among the peers. The stock is down 25.1% since the results and currently trades at $8.01.
The author has no position in any of the stocks mentioned