Despite Strong 1Q, Soft Outlook Causing Trouble For Advanced Energy Industries, Inc. (NASDAQ:AEIS)

Boston, MA 05/06/2014 (wallstreetpr) – Investors love it when a company reports positive results and then follows that with a positive outlook for the next reporting, or at least, soft results followed with strong outlook also end up cooling market nerves. However, Advanced Energy Industries, Inc. (NASDAQ:AEIS) reported strong results but issued tepid expectation for the next quarter and investors as usual are worried.

The company announced 2Q would be impacted by soft demand for its products as customer orders have declined. However, the company expects the balance of the year after the tepid 2Q to show significant improvements to the point of offsetting the challenges in prior quarters.

1Q in summary

Advanced Energy Industries, Inc. (NASDAQ:AEIS) realized a significant increase in profit and revenue in 1Q2014. The company’s performance in the latest quarter was supported by the two acquisitions completed this year, introduction of new products and aggressive cost-cutting. Therefore, the company expects these areas to continue supporting bottom-line in the upcoming quarters.

The company realized a profit of $14.7 million or 35 cents per share. That compared with $6.8 million or 17 cents per share realized in the comparable quarter a year earlier. Adjusted earnings in the quarter rose to 43 cents per share, up from 29 cents per share. Revenue in 1Q took a double-digit jump to $140.9 million, up 26 percent, thanks to the two acquisitions and product-line enrichment.

Tepid 2Q outlook

All was well at Advanced Energy Industries, Inc. (NASDAQ:AEIS) until the company announced 2Q performance expectation. And as the figures came, it was obvious that they were foreign to what the market was seeking. While Wall Street expects the company to generate revenue of $154 million in 2Q2014, the company guided revenue between $135 and $145 million.


The company concluded the quarter with cash and marketable securities of $122.7 million, down $27 million from the 4Q2013 figures. The impact in cash position was due to the completion of the acquisitions that included AEG Power Solutions. The company also acquired HiTek Power Group recently thereby giving it two acquisitions since January.

According to CEO Garry Rogerson, the completion of the acquisition together with the launch of new products and more aggressive cost-cuts should support revenue growth and bottom-line improvement. Moreover, the company noted that the expansion into new markets was paying off, and it expects to maintain the trend.

Published by Christine Lawrence

Christine Lawrence is a financial analyst. She loves analyzing socioeconomic trends in the background of financial moves. She has overall seven years of experience in Auditing, Finance and Writing.

Recent Stories

SignUp Now For Our Featured Newsletter