Veeco Instruments (VECO) Instruments Misses, Guides Lower, But Shares Rise

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09:21:28 pm on February 8, 2011

Not long ago, the expectations for LED stocks were in the stratosphere, so any earnings miss sent them reeling.  Not the case now.  With LED stocks either basing for some time or at multi month lows, an inferior earnings report won’t hurt the stock much.  Or, as is the case with Veeco today, the stock can rise.  The company missed analyst estimates (on the revenue side) this quarter AND guided lower for next quarter, but the stock rose with good volume today.

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The company reported a non GAAP EPS of $1.62 (vs the estimate for $1.61) on revenues of $300 million (vs the estimate for $302).  Ok, so not a bad quarter at all and the quarter over quarter growth is still huge, but when a company misses significantly on guidance, the stock usually gets hit, often times hard.  Veeco is forecasting an EPS of $1.02 – $1.39 vs the analyst estimate for $1.45 on revenue of $215 – $265 million vs the analyst estimate for $292 million.  Those are significant misses on guidance.  However, it appears traders are being forgiving because for the full year, the company is confident it may exceed estimates and notch over $1 billion in revenue with an EPS over $5/share.  Analysts predict revenue of $1.05 billion and EPS of $4.96.

John R. Peeler, Veeco’s Chief Executive Officer, commented, “The fourth quarter of 2010 was the best in our history, and we are extremely proud of our performance. Revenues were $300 million, gross margin was 51% and net income was $97 million. Veeco’s revenues grew 8% sequentially and 152% from the fourth quarter of last year. Both Veeco segments delivered excellent performance: LED & Solar revenues were up 6% sequentially to a record $258 million, and Data Storage revenues were up 21% to $42 million, our best quarter since 2008. Full year 2010 results were also at record levels, with revenue of $933 million and net income of $261 million. These results were achieved through a combination of world-class products, a focus on high-growth market opportunities, operational excellence, our flexible manufacturing strategy, and a deep commitment to satisfying our global customers.”

“Veeco’s fourth quarter bookings totaled $295 million,” continued Mr. Peeler, “with another very strong quarter in LED & Solar of $253 million, which was up about 4% sequentially. Orders for MOCVD systems were placed by twenty customers across all regions, with strength continuing in China. Data Storage orders were $42 million, up 20% sequentially as technology buys for new Veeco deposition systems continue.” The Company’s Q4 2010 book-to-bill ratio was .98 to 1, and quarter end backlog was $555 million.

Shares of VECO were up over 5% today and remain in good shape, currently in a base on base pattern. 

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