As semiconductor manufacturing stocks’ Q2 earnings season wraps, let's dig into this quarter's best and worst performers, including Teradyne (NASDAQ:TER) 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 1.39% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021 and semiconductor manufacturing stocks have not been spared, with share prices down 10% since the previous earnings results, on average.
With most major chip manufacturers as customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technology and devices.
Teradyne reported revenues of $684.4 million, down 18.6% year on year, beating analyst expectations by 4%. It was a mixed quarter for the company, with an impressive beat of analysts' EPS estimates but a decline in its operating margin. Also, while next quarter's revenue guidance was ahead, non-GAAP EPS guidance was slightly below expectations.
“We delivered revenue at the high end of our guidance range with higher semiconductor test shipments which more than offset weaker robotics demand in the quarter while profits exceeded plan on higher gross margins,” said Teradyne CEO Greg Smith.
The stock is down 14.3% since the results and currently trades at $98.21.Is now the time to buy Teradyne? Read our full report on Teradyne here.
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 0.49% since the results and currently trades at $138.07.
Is now the time to buy Applied Materials? Access our full analysis of the earnings results here, it's free.
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 24.4% since the results and currently trades at $99.47.
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 a significant improvement in its inventory levels but underwhelming revenue guidance for the next quarter.
The stock is down 9.48% since the results and currently trades at $93.77.
KLA Corporation (NASDAQ:KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $2.36 billion, down 5.29% year on year, beating analyst expectations by 4.19%. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates. It was also good to see that next quarter's revenue guidance came in higher than Wall Street's expectations.
The stock is down 5.18% since the results and currently trades at $457.6.
The author has no position in any of the stocks mentioned