News

26 October 2010

 

Veeco grows a further 25% in Q3; on track for $1bn in 2010

For continuing operations in third-quarter 2010 (excluding the Metrology business, sold to Bruker Corp on 7 October), epitaxial deposition and process equipment maker Veeco Instruments Inc of Plainview, NY, USA has reported record revenue of $277.1m (up 25% on $221.4m last quarter and 270% on just $74.7m a year ago).

Of this, 12.5% came from Data Storage revenue of $34.5m (down 3% on $35.7m last quarter but up 59% on $21.7m a year ago). LED & Solar comprised 87.5% of total revenue ($242.6m, up 31% on $185.6m last quarter and 350% on just $53m a year ago). Of this, MOCVD revenue was $236m (up from $175m last quarter) after Veeco shipped more than 100 MOCVD systems (up from 81 last quarter). The proportion of Veeco’s total revenue coming from LED & Solar has risen from 73% in Q2/2010 (before the sale of the Metrology business) and just 54% in 2009 and 29% in 2007.

Gross margin has risen from 40.9% a year ago and 44.6% last quarter to 48.9% (exceeding the guidance of 45–46%). Compared with just breaking even a year ago, net income has almost doubled for a second consecutive quarter, from $49.9m last quarter to $91.1m.

During the quarter, Veeco generated a record $79m in cash from operations, “the best financial position in our history”, comments CEO John R. Peeler. On 24 August, Veeco’s board authorized the repurchase of up to $200m of its common stock through August 2011, and during the quarter the firm purchased 930,000 shares of its stock at an average price of $34 per share (for a total of about $32m). Cash and short-term investments hence grew $52m during the quarter, from $414.8m to $466.8m.

Order bookings were $278m (up from $196m a year ago but down 10% on $310.5m last quarter). Of this, 13% came from Data Storage ($35m, more than double $17m a year ago, but down 30% on $50m last quarter) and 87% came from LED & Solar ($243m, up 36% on $179m a year ago but down 7% from last quarter’s $260m). During the quarter, order backlog fell from $597m to $569m.

“We have recently experienced rescheduling of tool shipments from the fourth quarter into the first quarter by several customers in Korea and Taiwan,” says CEO John R. Peeler. “Due to the recent strong order rate from China, our current plan for Q4 revenue includes a significant amount of large multi-tool shipments to key Chinese customers, many of whom are currently building or expanding their facilities,” he adds. During Q3, orders for MOCVD tools were placed by 15 customers, with strength continuing in China (including Elec-Tech, Sanan, and Tsinghua Tongfang) and additional account penetration in Taiwan (Epistar, Arima, GPI and Lextar). “While we currently expect that these tools will ship over the next few months, timing of revenue could shift into the first quarter due to customer facility readiness.” For fourth-quarter 2010, Veeco expects revenue to rise to $285–320m and gross margin to rise to 50–51%.

“We continue to see high levels of quoting activity for MOCVD systems, particularly in China and Taiwan, and our Data Storage business continues to experience healthy overall market conditions,” Peeler says. “Fourth-quarter orders will be equal to or better than the third quarter.”

“Further strength in MOCVD bookings currently forecasted for Q4 should enable us to exit 2010 with strong backlog, positioning Veeco for excellent revenue performance in the first half of 2011,” believes Peeler. “We have built our manufacturing capacity to 120 or more tools per quarter, and will head into 2011 with the ability to flex quarterly shipments up or down as required by customer demand.” Veeco targets 2011 revenue of more than $1bn (compared with just $282.4m for continuing operations in 2009).

“As we look to the future, we believe there may be an opportunity to sell thousands of MOCVD systems as LEDs fully penetrate display applications and adoption accelerates for solid-state lighting in 2011 and 2012,” Peeler continues. “In order to capitalize upon this opportunity, Veeco is expanding training, service and support functions in China, Taiwan and Korea, and accelerating our new product roadmap.”

“In our other businesses, quoting activity is picking up for our CIGS solar deposition systems as we make progress advancing these tools' process capabilities for high-efficiency/low-cost solar cells,” Peeler concludes.

See related items:

Veeco’s record Q2 driven by LED & Solar revenues growing 66% from Q1

Veeco’s LED & Solar orders up seven-fold year-on-year as backlog reaches $0.5bn

Veeco’s MOCVD revenue more than doubles sequentially

LED backlighting drives Veeco’s return to profit

See: Veeco Company Profile

Search: Veeco MOCVD

Visit: www.veeco.com

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