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It has been about a month since the last earnings report for Advanced Energy Industries (AEIS). Shares have added about 5.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Advanced Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AEIS Q3 Earnings Beat Estimates, Revenue Down Y/Y
Advanced Energy Industries reported non-GAAP earnings of 98 cents per share in the third quarter of 2024, beating the Zacks Consensus Estimate by 6.52%. The bottom line declined 23.4% on a year-over-year basis.
Revenues of $374.22 million missed the Zacks Consensus Estimate by 0.09% and declined 8.7% year over year, primarily due to the weakness across Industrial, Medical and Telecom sectors.
However, revenue was up 3% sequentially led by strength in Semiconductor and Data Center Computing.
AEIS’ End Market in Detail
Semiconductor Equipment: Revenues (52.8% of total revenues) generated from the market rose 6.7% year over year to $198 million. The figure topped the Zacks Consensus Estimate by 2.98%.
Sequentially, revenues increased 5%. The uptick can be attributed to accelerated deliveries driven by heightened AI demand.
AEIS reported successful design wins across its target markets. Key wins included high-density power modules for semiconductor testing and eVoS and eVerest subsystems for next-generation etch and deposition systems, which helped expand its market reach and enhanced engineering efficiency.
Industrial & Medical: Revenues (20.5% of the total revenues) from the market fell 33.3% year over year to $77 million and lagged the Zacks Consensus Estimate by 4.06%.
Soft market conditions hurt top-line growth.
Sequentially, revenues declined 3%. AEIS is experiencing strong design wins in applications, such as glass coating, test and measurement, battery production and diagnostic and therapeutic medical applications, including surgical robot systems.
Data Center Computing: Revenues (21.6% of the total revenues) from the market were $80.65 million, up 18.1% year over year. The figure missed the consensus mark by 1.37%.
Sequentially, revenues increased 11%. The upside can be attributed to heightened demand for AI infrastructure from hyperscale customers.
Telecom & Networking: Revenues (5.1% of the total revenues) generated from the market were $19.23 million, down 53.6% year over year. The figure missed the Zacks Consensus Estimate by 17.02%.
Sequentially, revenues declined 22%. The downside was primarily due to reduced infrastructure investments and high inventory levels.
Although industrial and medical revenues were slightly down, AEIS observed solid resale activity and declining inventory levels, which may soon lead to a demand recovery in these segments.