Veeco Instruments Inc. (VECO) reported non-GAAP diluted earnings per share of $1.62 for the fourth quarter 2010, ahead of the Zacks Consensus Estimate of $1.58. The result compares favorably with last year’s 36 cents.
For the financial year 2010, the company earned $4.42 per share, a considerable gain from 21 cents in the previous year. The Zacks Consensus was at $4.39.
Quarter in Detail
Revenue for the reported quarter of $300.0 million missed the Zacks Consensus Estimate of $302.0 million, but was up 151.9% from the previous year and rose 8.0% sequentially. On a segment basis, LED and Solar recorded an increase of 6.0% sequentially to $258.0 million. Data storage revenue was also up 21.0% from the previous quarter to $42.0 million.
For the financial year 2010, revenue was $933.2 million, up from 282.4 million in the previous year but below the Zacks Consensus Estimate of $989.0 million. The increase in revenues was primarily attributed to world class products, focus on high growth market opportunities and excellence in operational activities along with the flexibility in manufacturing strategies and a satisfied global customer base.
Bookings for the quarter totaled $294.9 million, up from $229.8 million in the previous year quarter.
Gross profit increased 185.6% from the previous year to $152.8 million. Gross margin for the quarter was 50.9%.
Operating profit increased 460.6% from the year ago quarter to $100.9 million. Operating margin for the quarter was 33.6%.
The company recorded a 0.98 to 1 book to bill ratio for the quarter with a $555 million backlog.
During the quarter, Veeco purchased 189,218 shares of its common stock at an average price of $34.33 per share, for a total of approximately $6.5 million, bringing the total purchased under the company’s share repurchase program during 2010 to $38.0 million, or about 1.1 million shares.
Quarter Ahead
Management expects first quarter 2011 revenue between $215 million and $265 million with earnings per share between 94 cents and $1.31 on GAAP basis. On a non-GAAP basis, management expects the company to earn between $1.02 and $1.39 per share.
Conclusion
Analyst estimates remained unchanged in the run up to the earnings release. The average estimate was $1.58 when the company reported earnings.
We note that Veeco Instruments has consistently exceeded estimates over the past year or so. The average surprise in the preceding 4 quarters is a positive 21.16%, and another positive surprise was therefore expected.
The company faces stiff competition from Agilent Technologies Inc. (A) and Brooks Automation Inc. (BRKS).
We currently have Zacks #3 Rank for Veeco Instruments Inc. which translates into a Hold on a short-term basis. We have a Neutral recommendation on a long-term basis.
AGILENT TECH (A): Free Stock Analysis Report
BROOKS AUTOMATN (BRKS): Free Stock Analysis Report
VEECO INSTRS-DE (VECO): Free Stock Analysis Report
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