Shares of Ultra Clean Holdings (NASDAQ: UCTT) surged over 6% in pre-market trading on Monday, following the company's impressive third-quarter earnings report that exceeded Wall Street expectations.
The semiconductor equipment manufacturer reported Q3 adjusted earnings of $0.35 per share, surpassing analysts' estimates of $0.33. Revenue for the quarter climbed 24.2% year-over-year to $540.4 million, also beating forecasts of $515.9 million.
The strong financial performance was driven by robust demand for Ultra Clean's products, particularly from the rapidly growing artificial intelligence (AI) and high-performance computing sectors. The company cited increased equipment spending for AI infrastructure and strong orders from its domestic China market as key growth catalysts.
Notably, Ultra Clean witnessed a significant uptick in revenue from its Shanghai manufacturing facility, fueled by local government investments. Additionally, the company's new Malaysia facility contributed to improved economies of scale, with revenue from the region nearly doubling year-over-year.
Looking ahead, Ultra Clean provided an optimistic outlook for the fourth quarter, projecting revenue between $535 million and $585 million, exceeding analysts' expectations of $537.9 million. The company also forecasted Q4 earnings per share in the range of $0.34 to $0.54, further boosting investor confidence.
Analysts remain bullish on Ultra Clean's prospects, with all four analysts covering the stock rating it a "buy." The average 12-month price target for the stock stands at $60, implying an upside potential of over 60% from its current levels.
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