On Aug 4, 2014, we issued an updated research report on MKS Instruments, Inc. (MKSI). The company reported strong results for the second quarter of 2014. Year over year, adjusted earnings increased a whopping 200% to 42 cents, while revenues grew 18% to $184.7 million.
The company received splendid contracts in the second quarter. Apart from follow-on orders for plasma and microwave products in Korea, orders for power, remote plasma, flow and pressure products were received from a major Asian semiconductor manufacturer. Moreover, the company received a contract for Liquozon cleaning subsystems from a Chinese display manufacturer.
Simultaneous with its organic growth, MKS Instruments has been evolving inorganically as well. The Granville-Phillips division, acquired in May, is expected to boost MKS Instruments’ earnings significantly starting from the second half of 2014. The acquisition is expected to generate $30 million revenues annually with adjusted earnings per share estimated in the range of 10 to 12 cents.
Additionally, MKS Instruments has been enhancing shareholders’ values over the past several quarters. In second-quarter 2014, the company increased its dividend to 16.5 cents from 16 cents per share, while returning $8.8 million. Moreover, the company repurchased roughly 70,000 shares totaling $20 million.
With a market capitalization of $1.7 billion, MKS Instruments sports a Zacks Rank #1 (Strong Buy). Other stocks in the industry worth considering include Tessera Technologies Inc. (TSRA), Brooks Automation, Inc. (BRKS) and Siliconware Precision Industries Co. Ltd. (SPIL). While Tessera Technologies sports the same rank as MKS Instruments, Brooks Automation and Siliconware Precision Industries hold a Zacks Rank #2 (Buy).
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