Stock Alert: Will Ultra Clean Beat Expectations?

Ultra Clean Holdings (UCTT) is scheduled to report its first-quarter results today, April 29, before market open.

Ultra Clean Holdings is a leading developer and supplier of critical subsystems, ultra-high purity cleaning and analytical services primarily for the semiconductor industry.

When the company reported its fourth-quarter earnings in February, it had widened its first-quarter earnings guidance citing limited visibility due to the coronavirus situation. Ultra Clean expects first-quarter revenue to be in the range of $290.0 million to $320.0 million and adjusted EPS to be between $0.40 and $0.52. On average 5 analysts polled by Thomson Reuters expect earnings of $0.44 per share on revenue of $302.51 million for the quarter.

Last year, Ultra Clean earnings had surpassed the Street view in all the four quarters.

In the fourth quarter, revenue had increased to $286.4 million from $254.3 million in the same quarter a year ago on increased demand for the company’s products. Excluding items, earnings of $0.40 per share beat the Street view at $0.26.

High demand coupled with the company’s cost reduction initiatives had brought in a record $121 million in cash from operations in 2019 and had paid down its long-term debt by $50 million.

“The semi industry continues to gain momentum, and all indications point toward a healthy year for the industry, our customers and UCT. Increased capex spending is supporting strong demand for industry-leading 7-nanometer and 5-nanometer technologies across multiple platforms relating to 5G rollout and artificial intelligence,” Jim Scholhamer, Chief Executive Officer had commented during the fourth-quarter conference call.

UCTT recovered more than 35% from its most recent low of $12.44, hit last month. Tuesday, it was up $0.74 or 4.58% before closing at $16.91. The stock has traded in the range of $11.20- $30.00 in the last 52 weeks.

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