Maybe LED Market Isn’t That Bad (VECO, AMAT, CREE, RBCN, LEDS, AIXG)

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Veeco Instruments Inc. (NASDAQ: VECO) makes production equipment for LEDs and solar panels, so analysts weren’t too eager to forecast good news for the company’s first quarter. But after markets closed yesterday, Veeco reported adjusted EPS of $0.49 on revenue of $139.9 million, crushing the consensus EPS estimate of $0.19 and the revenue estimate of $126 million. Revenue and EPS were still way down from the first quarter of 2011, when the company posted revenue of $254.7 million and adjusted EPS of $1.44.

Had it not been for the collapse of the solar PV industry in 2011, the LED business would have gotten a lot more attention. Shares are down anywhere from -67% to -22% for LED-related companies like Applied Materials Inc. (NASDAQ: AMAT), Cree Inc. (NASDAQ: CREE), Rubicon Technology Inc. (NASDAQ: RBCN), SemiLEDS Corp. (NASDAQ: LEDS), and Aixtron SE (NASDAQ: AIXG).

SemiLEDS reported a smaller than expected loss about a month ago, but also said that negative gross margins would continue. In its forecast last night, Veeco said that revenue would total $120-$145 million in the second quarter and adjusted EPS would be $0.29-$0.48. The consensus estimates had been for revenue of $128.2 million and adjusted EPS of $0.23. The company expects to garner revenue of $500-$600 million for the full fiscal year.

The company’s CEO had this to say:

While [equipment] bookings grew modestly in the first quarter, we have not yet seen a clear inflection in customer buying patterns. LED customers remain cautious about capacity investment plans and it is still unclear when the [equipment] market will recover. Some positive signs are emerging, including increasing tool utilization rates in Korea, Taiwan and China, and a pick-up in customer quoting activity.

Veeco’s shares are up more than 14% today at $34.45 in a 52-week range of $20.35-$57.67. The other LED makers are also up, with Rubicon getting the biggest boost of about 7.6%. That’s probably because Rubicon has not yet reported first quarter results nor has the company set a date yet to do so.

Paul Ausick

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