Veecohas a history of
growth. Look at last quarter’s results. Sales were $93.6 million, which
was a 21% increase from the same period a year ago. Bookings were also
vigorous, reaching $132.4 million (a 65% increase from last year). Then
again, such growth is common in Veeco’s industry. The company is a leader
in process equipment and metrology tools for optics, data storage and
semiconductors.
There were also profits. In the past quarter, net income was $5.1 million.
But this is the past. Wall Street only cares about the future. Like many
other high-tech companies, Veeco has been experiencing a slowdown. Of
course, Wall Street has been unforgiving.
In the past week, the company warned about its third-quarter earnings. Yep,
analysts were overestimating things. And, yes, Wall Street reacted
savagely, as the stock plunged $34.97 to $67.56.
Veeco says it will show earnings of 18 cents to 22 cents a share. The
consensus estimates were between 38 cents to 42 cents.
However, the reaction does seem curious. The downfall is primarily the
result of a recent acquisition of CVC (the company sells equipment to make
semiconductors and disk drives). Basically, sales are expected to be off by
about $7 million. Veeco also experienced complications with its Ion Tech
unit, which was another recent acquisition. But according to Veeco, it has
solved the problems.
It is quite common for acquisitions to pose integration problems. Yet, in
the case of Veeco, the acquisitions should ultimately be accretive. The CVC
acquisition will allow Veeco to deliver sophisticated equipment systems for
next generation data storage manufacturers, as well as advanced systems for
the active device optical telecom market. As for the Ion Tech acquisition,
Veeco gets such things as state-of-the-art optical-monitoring sensors.
Essentially, Veeco is creating a one-stop shop for the etch, deposition and
metrology equipment marketplace. And, while there are growing pains, they
appear to be short-term in nature.