Q3 Earnings Highs And Lows: IPG Photonics (NASDAQ:IPGP) Vs The Rest Of The Semiconductor Manufacturing Stocks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how IPG Photonics (NASDAQ:IPGP) and the rest of the semiconductor manufacturing stocks fared in Q3.
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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.
In light of this news, share prices of the companies have held steady as they are up 3.1% on average since the latest earnings results.
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 $233.1 million, down 22.6% year on year. This print exceeded analysts’ expectations by 2.3%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ adjusted operating income and EPS estimates.
"IPG has made important progress strategically and operationally in the last several months,” said Dr. Mark Gitin, IPG Photonics’ Chief Executive Officer.
IPG Photonics Total Revenue
IPG Photonics delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 6.8% since reporting and currently trades at $73.93.
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.52 billion, up 6.9% year on year, outperforming analysts’ expectations by 4%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.
Marvell Technology Total Revenue
The market seems happy with the results as the stock is up 22.8% since reporting. It currently trades at $117.90.
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 $807.7 million, down 9.1% year on year, falling short of analysts’ expectations by 3%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations.
Entegris delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5% since the results and currently trades at $101.82.
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 $2.84 billion, up 18.5% year on year. This print topped analysts’ expectations by 3.1%. It was a very strong quarter as it also recorded a significant improvement in its inventory levels and a solid beat of analysts’ adjusted operating income estimates.
The stock is down 1.7% since reporting and currently trades at $679.77.
Operating through a largely Asian facility footprint, Amkor Technologies (NASDAQ:AMKR) provides outsourced packaging and testing for semiconductors.
Amkor reported revenues of $1.86 billion, up 2.2% year on year. This result surpassed analysts’ expectations by 1.2%. Taking a step back, it was a slower quarter as it recorded revenue guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ EPS estimates.
The stock is down 14.7% since reporting and currently trades at $25.17.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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