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Veeco Q1 2014 results blossom

An increase in LED & Solar revenue increased to $71 million, with $64 million in MOCVD
Veeco Instruments Inc. has announced its financial results for the first quarter ended March 31st, 2014.

The semiconductor reactor manufacturer has reported its results on a U.S. GAAP basis, and has also provided results excluding certain items.

Veeco’s first quarter GAAP results include a one-time gain of $29 million from the reversal of Synos acquisition related contingency accruals since it determined that the post-closing milestones necessary to trigger such contingency payments were not expected to be achieved.                                                                                                                                                                                                                                                                           

"Veeco’s first quarter top and bottom line performance improved meaningfully from the fourth quarter of last year,” commented John R. Peeler, Chairman and Chief Executive Officer. “We delivered $91 million in revenue, up 24 percent from the fourth quarter of 2013, driven primarily by an increase in LED & Solar revenue to $71 million ($64 million in MOCVD).

First quarter 2014 Data Storage revenues were $20 million, up from $17 million in the fourth quarter of 2013. EBITA loss was $3 million, significantly improved from last quarter’s loss, benefiting from higher volume, an improvement in gross margins to 37 percent, and lower operating spending. As forecasted, our investments in next generation products and in our growth businesses caused cash to decline modestly during the quarter. Yet our cash and investments balance remains strong at $483 million.”

Peeler continued, “Veeco’s first quarter 2014 orders improved by 21 percent from the fourth quarter of 2013 to $103 million, the highest level we have reported in nearly two years. This increase was driven by a 59 percent sequential improvement in MOCVD orders to $83 million, which represents the highest amount booked since the third quarter of 2011. Orders were received from top LED customers throughout Asia and elsewhere.”

First quarter 2014 Data Storage and MBE orders each declined from the fourth quarter of 2013, to $15 million and $5 million, respectively.

Second Quarter 2014 Guidance and Outlook

Veeco’s second quarter 2014 revenue is currently forecasted to be between $87 million and $97 million. Earnings per share are currently forecasted to be between ($0.46) to ($0.36) on a GAAP basis.

Peeler commented, “After a long downturn in our MOCVD business, LED fab utilisation rates have improved to high levels at most key accounts and LED adoption is happening faster than many had expected. Our customers are also reporting better market demand for LED backlighting products. It is encouraging to see that our leading customers are beginning to place orders for capacity expansions."

" We currently anticipate that Veeco’s second quarter 2014 orders will be similar to or better than first quarter orders. Yet, the timing and magnitude of key customer expansions could cause MOCVD orders to be lumpy and somewhat unpredictable on a quarterly basis, and we lack the visibility to see into the second half of the year. We continue to invest in MOCVD product and technology development to further improve our customers’ cost of ownership and manufacturing capability.”

Peeler concluded, “We are pleased to have made progress improving Veeco’s profitability and remain focused on our strategy to turn around our performance: 1) developing and launching game-changing new products that enable cost effective LED lighting, flexible OLED encapsulation and other emerging technologies; 2) improving customer cost of ownership as well as our gross margins; 3) driving process improvement initiatives to make us more efficient; and 4) lowering expenses.”

A conference call reviewing these results is available until 8:00pm ET on May 19th, 2014 at 888-203-1112 or 719-457-0820, using passcode 5588173, and on the Veeco website. The firm has also posted an accompanying slide presentation on its website.


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