Technology Stocks

Brooks Automation, Inc (NASDAQ:BRKS) Comes Up a Bit Short

Brooks Automation, Inc (NASDAQ:BRKS) recently announced its Q4 data. Non-GAAP EPS was $0.40 in the quarter, representing 15% growth year over year. The EPS growth were driven by 14% revenue growth and operating margin expansion through leverage of operating expense.

According to the company’s release, the positive operating margin improvement was largely offset by interest expense on new debt in the year. Life Sciences revenue was $51 million, 16% higher compared to Q4 2017, inclusive of 6% organic growth. Semiconductor Solutions revenue was $157 million, a 14% improvement year over year and a decline of 10% compared to the third quarter of 2018.

Brooks Automation, Inc (NASDAQ:BRKS) bills itself as a company that provides automation and cryogenic solutions for various applications and markets.

It operates in two segments, Brooks Semiconductor Solutions Group and Brooks Life Science Systems. The Brooks Semiconductor Solutions Group segment offers critical automated transport, vacuum, and contamination controls solutions and services.

Its products include atmospheric and vacuum robots, robotic modules, and tool automation systems that offer precision handling and clean wafer environments; automated cleaning and inspection systems for wafer carriers, as well as reticle pod cleaners and stockers; and vacuum pumping and thermal management solutions for critical process vacuum applications.

This segment also offers repair, diagnostic, and installation services, as well as spare parts and productivity enhancement upgrade services.

The Brooks Life Science Systems segment provides automated cold storage systems; consumables, including various formats of racks, tubes, caps, plates, and foils; and instruments used for labeling, bar coding, capping, decapping, auditing, sealing, peeling, and piercing tubes and plates. It also provides sample management services, such as on-site and off-site sample storage, cold chain logistics, sample relocation, bioprocessing, disaster recovery, and business continuity, as well as project management and consulting.

In addition, this segment offers sample intelligence software solutions and customer technology integration; and laboratory workflow scheduling for life science tools and instrument work cells, sample inventory and logistics, environmental and temperature monitoring, and clinical trial and consent management, as well as planning, data management, virtualization, and visualization services. The company serves semiconductor capital equipment and sample management markets for life sciences in approximately 50 countries.


Tough Tape

We started off by noting that BRKS recently hit the wires with the announcement of its Q4 data. While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action BRKS shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -14% on above-average trading volume.

All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -17%.

“Our 2018 fiscal year was strong from start to finish and has charted a new path with transformative M&A agreements that are reshaping the company,” commented Steve Schwartz, CEO of Brooks Automation. “The acquisition of GENEWIZ, which we completed last week, is expanding our reach in sample services to thousands of additional customers, supported by a highly talented global team.  Further, we signed an agreement in August to sell our Semiconductor Cryogenics business and expect to complete the sale during our second fiscal quarter of 2019.  We believe these transactions strengthen our growth portfolio and extend our position as the leading provider of life science sample services.  Meanwhile we continued our strong operating performance in the semiconductor business and delivered yet another consecutive growth quarter in life sciences, yielding a 20% top-line growth for the year.”

Brooks Automation, Inc (NASDAQ:BRKS) has a strong balance sheet, with cash levels far exceeding current liabilities ($221.5M against $164.9M).

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