FormFactor (FORM) Beats Earnings & Revenue Estimates in Q1

FormFactor's (FORM) first-quarter results are driven by steady overall demand and good execution. Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="FormFactor Inc. FORM reported first-quarter adjusted earnings of 20 cents per share, beating the Zacks Consensus Estimate by a couple of cents. The figure decreased 35.5% sequentially but increased 17.6% year over year.” data-reactid=”11″>FormFactor Inc. FORM reported first-quarter adjusted earnings of 20 cents per share, beating the Zacks Consensus Estimate by a couple of cents. The figure decreased 35.5% sequentially but increased 17.6% year over year.

Revenues increased 11.8% from the year-ago quarter but decreased 6.2% sequentially to $132.2 million. The top line beat the Zacks Consensus Estimate of $130 million and was at the high end of the company’s guided range of $127-$135 million.

Quarter Details

Probe card segment revenues were $108.1 million in the first quarter, down 6.9% from fourth-quarter 2018.

Within the probe card segment, Foundry & Logic sales (accounting for 54% of its total revenues) decreased 6.6% on a sequential basis to $71.6 million.

Revenues for DRAM products (22% of revenues) were $28.9 million, down 2.4% sequentially.

Flash revenues were $7.6 million, down on a sequential basis. Almost $4.4 million of the flash revenues were from NAND flash applications.

Systems revenues in the first quarter were $24.1 million, down 2.5% sequentially.

Operating Details

On a non-GAAP basis, gross margin expanded 80 basis points (bps) year over year but was flat sequentially at 44.1%. The year-over-year increase was primarily due to a strong product mixin its engineering systems segment.

Non-GAAP operating expenses were $38.1 million in the first quarter, up $0.9 million from the fourth quarter. The increase was due to higher R&D investments, partially offset by lower SG&A expenses.

Balance Sheet & Cash Flow

At the end of the first quarter, cash and cash equivalents as well as marketable securities were $159.8 million compared with $149 million in the fourth quarter.

Cash flow from operations was $20.6 million in the first quarter. Free cash flow was $14.9 million, down from $15.8 million in the fourth quarter.

Guidance

FormFactor expects second-quarter 2019 revenues between $131 million and $139 million. The Zacks Consensus Estimate for revenues is currently pegged at $134.3 million.

On a non-GAAP basis, the company projects gross margin within 41-44% and earnings in the band of 15-21 cents per share. The Zacks Consensus Estimate for earnings is pegged at 21 cents per share.

FormFactor, Inc. Price, Consensus and EPS Surprise

FormFactor, Inc. Price, Consensus and EPS Surprise | FormFactor, Inc. Quote

Zacks Rank & Stocks to Consider

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Currently, Formfactor carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Facebook, Inc. FB, Shopify Inc. SHOP and AXT, Inc.  AXTI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.” data-reactid=”39″>Currently, Formfactor carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Facebook, Inc. FB, Shopify Inc. SHOP and AXT, Inc. AXTI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Facebook, Shopify and AXT is currently projected at 18.2%, 23.7% and 15%, respectively.

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