MKS Instruments MKSI reported adjusted earnings of $2.15 per share in fourth-quarter 2024, up from the year-ago quarter’s earnings of $1.17 per share. The figure beat the Zacks Consensus Estimate by 11.98%.

Revenues of $935 million beat the consensus mark by 2.68% and increased 4.7% year over year.

Products revenues (88.1% of total revenues) were $824 million, up 5% year over year. The figure beat the Zacks Consensus Estimate by 3.92%.

Services revenues (11.9% of total revenues) increased 2.8% year over year to $111 million. The figure missed the Zacks Consensus Estimate by 6.12%.

MKS Instruments, Inc. Price, Consensus and EPS Surprise

MKS Instruments, Inc. price-consensus-eps-surprise-chart | MKS Instruments, Inc. Quote

MKSI’s shares have lost 9% in the trailing 12-month period against the Zacks Computer & Technology sector’s growth of 21.7%. We believe the raised guidance will help MKSI stock to recover.

Quarterly Update

Revenues from the Semiconductor market (42.8% of total revenues) increased 10.5% year over year to $400 million. The figure beat the Zacks Consensus Estimate by 5.39%.

Electronics & Packaging revenues (27.2% of total revenues) were $254 million, higher than $226 million reported in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 6.66%.

Specialty Industrial revenues (30.1% of total revenues) declined 7.9% year over year to $281 million. The figure missed the Zacks Consensus Estimate by 4.12%.

Operating Details

In the fourth quarter, the adjusted gross margin expanded 110 basis points (bps) on a year-over-year basis to 47.2%.

Research & development, as a percentage of revenues, contracted 90 bps year over year. Sales, general & administrative expenses, as a percentage of revenues, expanded 90 bps on a year-over-year basis.

MKS Instruments reported a non-GAAP operating income of $199 million, up 9.3% year over year. The adjusted operating margin expanded 90 bps year over year to 21.3%.

Adjusted EBITDA was up 8.7% year over year to $237 million. Adjusted EBITDA margin expanded 90 bps year over year to 25.3%.

Balance Sheet

As of Dec. 31, 2024, MKS Instruments had cash and cash equivalents of $714 million compared with $861 million as of Sept. 30, 2024.

Cash flow from operations was $176 million in fourth-quarter 2024 compared with $163 million reported in the third quarter.

Free cash flow was $125 million compared with $141 million reported in the previous quarter.

In the fourth quarter, the company paid cash dividends of $15 million or 22 cents per share.

Guidance

MKSI expects first-quarter 2025 revenues of $910 million (+/- $40 million).

The company expects an adjusted EBITDA of $217 million (+/- 23 million).

On a non-GAAP basis, MKSI expects earnings of $1.40 (+/- 27 cents) per share.

MKSI’s Zacks Rank & Stocks to Consider

Currently, MKSI carries a Zacks Rank #3 (Hold).

Akami Technologies AKAM, Arista Networks ANET and Autohome ATHM are some better-ranked stocks that investors can consider in the broader sector. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Akami Technologies shares have risen 5.7% year to date. AKAM is set to report its fourth-quarter 2024 results on Feb. 20.

Arista Networks shares have lost 0.8% year to date. ANET is set to report its fourth-quarter 2024 results on Feb. 18.

Autohome shares have gained 10.1% year to date. ATHM is set to report its fourth-quarter 2024 results on Feb. 20.

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