November 7, 2019

Chart of the Day: Russell 3000 Semiconductor Equipment

by David Aurelio.

Analysts are becoming bullish on semiconductor equipment companies, which can be seen in upward revisions to many of the group’s constituents within the Russell 3000. Year-on-year (Y/Y) earnings rates are expected to improve going forward and become positive in the first quarter of 2020. The chart above shows the Y/Y revenue and earnings growth expectations as well as the EPS revisions for several of the Russell 3000’s semiconductor equipment constituents.

Seventy-three percent of the semiconductor equipment companies within the Russell 3000 have reported 19Q3 earnings. In aggregate, earnings have come in 10.8% above expectations, while revenue have come in 2.9% above estimates. Brooks Automation, Inc. (BRKS.O) is among those to beat on both the top (2.5%) and bottom line (5.3%). Stephen S. Schwartz, Brooks Automation, Inc. – CEO, President & Director, spoke about the outlook of their semiconductor business saying, “Across all of our semiconductor business, our assessment of the market is that the positive momentum in the first half of fiscal 2020 is being driven by foundry spending for 7 and 5 nanometer capacity additions. However, we’re also becoming more positive about memory spending awakening in the second half of fiscal 2020, as we’ve begun to receive orders from some tier 2 Korean OEMs for the first time in several quarters. For the most part, these OEMs largely provide equipment to Korean memory fabs.”

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