FEI Company (FEIC) has reported a 24.33 percent fall in profit for the quarter ended Sep. 28, 2014. The company has earned $21.65 million, or $0.51 a share in the quarter, compared with $28.61 million, or $0.67 a share for the same period last year.
Revenue during the quarter grew 4.24 percent to $227.76 million from $218.50 million in the previous year period. Gross margin for the quarter contracted 26 basis points over the previous year period to 47.67 percent.
Total expenses were 88.54 percent of quarterly revenues, up from 84.44 percent for the same period last year. That has resulted in a contraction of 410 basis points in operating margin to 11.46 percent.
Operating income for the quarter was $26.11 million, compared with $34 million in the previous year period.
"Earnings were at the high end of our guidance range and we are encouraged by our gross margin progress," commented Don Kania, president and CEO. "We exited the quarter with record backlog reflecting strong customer demand for our differentiated workflows across both Science and Industry. We continue to see increased interest from customers in key new adjacent markets of structural biology and near-line semiconductor. While foreign exchange movements negatively impacted our reported revenue and backlog, our future earnings stand to benefit from the stronger US dollar."
"Looking forward, we expect fourth quarter revenue to be up substantially over the third quarter, supported by the strong bookings activity over the past several quarters. Profitability is expected to improve in the fourth quarter and we believe we are on track to achieve our mid-2015 targets of 50% gross margin and 20% operating income."
"For the fourth quarter of 2014, revenue is expected to be in the range of $265.0 million to $280.0 million. GAAP earnings per share are expected to be in the range of $0.80 to $0.94. GAAP earnings guidance for the fourth quarter includes restructuring costs of approximately $7.5 million. Non-GAAP earnings per share are expected to be in the range of $0.94 to $1.08. The effective tax rate is expected to be approximately 20%," the company said.
Cash Flow
FEI Co has generated cash of $72.60 million from operating activities during the nine month period, down 48.23 percent or $67.65 million, when compared with the last year period.
The company has spent $118.44 million cash to meet investing activities during the nine month period as against cash outgo of $74 million in the last year period. It has incurred net capital expenditure of $35.43 million on net basis during the nine month period, down 24.86 percent or $11.72 million from year ago period.
The company has spent $49.99 million cash to carry out financing activities during the nine month period as against cash outgo of $1.95 million in the last year period. It has spent net of $29.69 million on repurchase of common stocks.
Cash and cash equivalents stood at $272.44 million as on Sep. 28, 2014, down 18.80 percent or $63.06 million from $335.50 million on Sep. 29, 2013.
Working Capital
FEI Co has witnessed a decline in the working capital over the last year. It stood at $543.41 million as at Sep. 28, 2014, down 14.15 percent or $89.56 million from $632.97 million on Sep. 29, 2013. Current ratio was at 2.84 as on Sep. 28, 2014, down from 3.39 on Sep. 29, 2013.
Cash conversion cycle (CCC) has decreased to 172 days for the quarter from 184 days for the last year period. Days sales outstanding went up to 89 days for the quarter compared with 85 days for the same period last year.
Days inventory outstanding has decreased to 147 days for the quarter compared with 153 days for the previous year period. At the same time, days payable outstanding went up to 64 days for the quarter from 54 for the same period last year.
