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Advanced Energy (AEIS) Q2 Earnings Beat, Revenues Rise Y/Y

·3 min read

Advanced Energy Industries, Inc. AEIS reported second-quarter 2022 non-GAAP earnings of $1.44 per share, beating the Zacks Consensus Estimate by 26.3%. Further, the bottom line increased 15.2% from the year-ago quarter.

Revenues of $440.9 million surpassed the Zacks Consensus Estimate of $402 million. The top line improved 22% from the year-ago quarter.

Strong momentum across semiconductor equipment, telecom and networking, and industrial and medical end markets drove top-line growth.

Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise

 

Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise
Advanced Energy Industries, Inc. Price, Consensus and EPS Surprise

Advanced Energy Industries, Inc. price-consensus-eps-surprise-chart | Advanced Energy Industries, Inc. Quote

End Market in Detail

Semiconductor Equipment: Revenues generated from the market grew 30% year over year to $228.8 million (51.9% of the total revenues), driven by the growing momentum across dielectric etch and RPS. Also, strong design wins, with high-voltage solutions, were positives.

Industrial & Medical: Revenues from the market grew 26% year over year to $104.9 million (23.8% of the total revenues) in the reported quarter. Top-line growth in the market was driven by growing design wins in medical, indoor farm lighting, factory automation and industrial printing.

Data Center Computing: Revenues from the market were $69.2 million (15.7% of the total revenues), down 0.4% from the year-ago quarter.

Telecom & Networking: Revenues generated from the market were $38.04 million (8.6% of the total revenues), up 19% from the prior-year quarter.

Operating Results

In the second quarter, the non-GAAP gross profit margin was 37.1%, which contracted 90 basis points (bps) from the year-ago quarter.

Non-GAAP operating expenses were $94.2 million, up 14.1% year over year. As a percentage of revenues, the figure contracted 150 bps year over year to 21.4% in the reported quarter.

The non-GAAP operating margin was 15.8%, contracting 70 bps from the prior-year quarter.

Balance Sheet & Cash Flow

As of Jun 30, 2022, cash and cash equivalents were $372.7 million compared with $521.2 million as of Mar 31, 2022.

Total debt was $383 million at the second-quarter end, down from $387.9 million at the first-quarter end.

For the second quarter, cash flow from operations was $37.6 million, which jumped from $9.9 million in the first quarter.

The company made dividend payments of $3.8 million and repurchased shares worth $17 million in the quarter.

Guidance

For third-quarter 2022, Advanced Energy expects non-GAAP earnings of $1.30 per share (+/- 30 cents). The Zacks Consensus Estimate is pegged at $1.37 per share.

The company anticipates revenues of $435 million (+/- $25 million). The Zacks Consensus Estimate for the same is pegged at $418.4 million.

Zacks Rank & Stocks to Consider

Currently, Advanced Energy has a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Keysight Technologies KEYS, ASE Technology ASX and Asure Software ASUR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Keysight Technologies has lost 19.9% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.

ASE technology has lost 24.6% in the year-to-date period. The long-term earnings growth rate for ASX is currently projected at 23.1%.

Asure Software has lost 32.3% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.


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