Can MKS Instruments (MKSI) Keep the Earnings Streak Alive? - Analyst Blog

Semiconductor company, MKS Instruments, Inc. MKSI is set to report first-quarter 2014 results on Apr 23, after the market closes. In the last quarter, the company delivered 16.7% positive earnings surprise. Let's see how things are shaping up for this announcement.

Factors to Consider

In the fourth quarter of 2013, MKS Instruments reported strong year-over-year results, with adjusted earnings per share of 42 cents, 320% higher than the year-ago quarter. The high income was primarily due to the build up of a semiconductor fab unit in China. Total revenue in the quarter increased 52.8% year over year to $204.4 million.

Management believes the semiconductor markets will stabilize over the next few quarters, based on increased demand for new technologies to be used in full-featured mobile phones. Accordingly, revenues are expected in the range of $190.0 to $205.0 million in the first-quarter 2014, while adjusted earnings per share are anticipated within the 35–48 cents range.

Earnings Whispers?

Our proven model does not conclusively show that MKS Instruments is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as we see below.

Zacks ESP:  This is because the Most Accurate estimate stands at 42 cents flat with the Zacks Consensus Estimate. Hence, the difference is 0.00%.

Zacks Rank: MKS Instruments' Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks to Consider

Here are other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Advanced Energy Industries, Inc. AEIS, Earnings ESP of +10.00% and a Zacks Rank #1 (Strong Buy).

Affymetrix Inc. AFFX, Earnings ESP of +50.00% and a Zacks Rank #2 (Buy).

Ciena Corporation CIEN, Earnings ESP of +66.67% and a Zacks Rank #3.