Axcelis Technologies Inc (NASDAQ:ACLS) Q3 2019 Earnings Conference Call - Final Transcript
Nov 01, 2019 • 08:30 am ET
Good day, ladies and gentlemen. And welcome to the Axcelis Technologies call to discuss the company's results for the Third Quarter of 2019. My name is Gigi, and I'll be your coordinator for today. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference.
[Operator Instructions] As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the presentation over to your host for today's call, Mary Puma, President and CEO of Axcelis Technologies. Please proceed, ma'am.
Mary G. Puma
Thank you, Gigi. With me today is Kevin Brewer, Executive Vice President and CFO; and Doug Lawson, Executive Vice President of Corporate Marketing and Strategy. If you have not seen a copy of our press release issued last night, it is available on our website. Playback service will also be available on our website as described in our press release.
Please note that comments made today about our expectations for future revenues, profits and other results are forward-looking statements under the SEC safe harbor provision. These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our Form 10-K Annual Report and other SEC filings, which we urge you to review. Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements.
Axcelis has achieved five years of consecutive quarterly profits. We believe Q3 to be the low point of the cycle and expect a gradual recovery. Based on this, we are also marking the first time we have maintained through cycle profitability as a public company. Our accomplishments provide a strong indication of the many successful changes we have made to our business to drive revenue growth and improve profitability. I would like to open this call by thanking our employees for all their hard work, dedication and ingenuity that has made this possible.
Revenue in the third quarter of $69.5 million was in line with guidance. Earnings per share of $0.02 was above the midpoint of guidance and well above consensus. Gross margins of 44% were above guidance, driven by a significant mix of Purion product extensions. Strong gross margins combined with continued tight spending controls allowed us to maintain profitability for the quarter.
During the third quarter, memory accounted for just 14% of our shipments, with the majority of shipments, 86% going to mature foundry/logic customers, particularly those manufacturing power devices and image sensors.
The geographic mix of our systems shipments in the third quarter was, Korea 50%, China 31%, and Europe and the US 19%. This breakout is reflective of a strong mature foundry/logic mix in all of these regions including Korea. For the fourth quarter, we are forecasting revenues to increase by 33% to 44%, ranging from $90 million to $100 million. We are also forecasting gross margins of approximately 38% driven by a systems mix