Tech Stock in Motions: Nanometrics Incorporated (NASDAQ: NANO)

On Monday, Nanometrics Incorporated (NASDAQ: NANO) oscillated between $36.08 and $36.89 before concluding trading period higher +1.01 percent at $36.86. The stock recorded total trading quantity of 149,802 shares as compared to its average volume of 347,012 shares. The firm has a total market worth of $347.01k and $880.608M shares remain outstanding.
Nanometrics Incorporated (NANO) recently reported financial results for its 1^st quarter ended March 31, 2018.

1^st Quarter 2018 Highlights:

• Record Financial Results. Strong positions with key consumers and a continued positive business environment, particularly for memory, helped drive record revenues, gross margin, and earnings per share. Revenues of $82.3M were up 39 percent from the first quarter of 2017, and up 5 percent from the fourth quarter of 2017. Record gross margin was higher than forecast, Because of the greater revenue volume and an raised contribution of high-margin upgrades, as well as a favorable accrual adjustment.
• Important Competitive Wins and Increasing Market Share.The company recently stated 2 important competitive wins: the selection of the IMPULSE^®+ integrated metrology platform by a leading-edge DRAM manufacturer, and the adoption of Nanometrics’ broad portfolio of fab-wide process control solutions by a domestic China 3D-NAND manufacturer. Both of these new positions resulted in raised market share, stronger revenues for the first quarter, and are also contributing to the company’s strengthened outlook for the full year 2018.
• Strong Free Cash Flow Generation.The company stated $32.7M in cash flow from operating activities, and after capital expenditures of $1.3M, generated a record $31.4M in free cash flow. Total cash, cash equivalents and marketable securities raised $6.9M quarter-over-quarter, after $23.0M of stock repurchases, to end the quarter with a balance of $123.9M.
• Completion of $50M Stock Repurchase Program.  Nanometrics completed the $50M stock repurchase program reported last November, buying back just under 2M shares over the last two quarters at an average price of $25.48 per share.

1^st Quarter 2018 Summary
Revenues for the 1^st quarter of 2018 were $82.3M, up 5.3 percent from $78.2M in the 4^th quarter of 2017, and up 38.8 percent from $59.3M in the 1^st quarter of 2017.  On a GAAP basis, gross margin was 57.7 percent, contrast to 56.2 percent in the previous quarter and 48.0 percent in the year-before period.  Operating income was $20.6M, contrast to $19.2M in the previous quarter and $5.5M in the year-before period.  Net income was $16.4M or $0.67 per diluted share, contrast to $10.8M or $0.42 per diluted share in the previous quarter and $5.4M or $0.21 per diluted share in the first quarter of 2017.

Business Outlook
Management expects 2^nd quarter 2018 revenues in the range of $82 to $90M. Gross margin is predictable to be about 56 percent, plus or minus 1 percent, on both a GAAP and non-GAAP basis. Management expects 2nd-quarter operating expenses to range between $27.0M and $28.0M on both a GAAP and non-GAAP basis, and earnings in the range of $0.57 to $0.74 per diluted share on both a GAAP and non-GAAP basis. The earnings per share guidance reflects an improved tax rate of 22 percent to 23 percent, contrast to the 25 percent estimate before in guidance.

Return on equity (ROE) was noted as 15.50 percent while return on investment (ROI) was 12.40 percent. The stock’s institutional ownership stands at 85.70 percent. (NANO) EPS growth ratio for the past five years was 46.80 percent while Sales growth for the past five years was 7.20 percent.

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