BE Semiconductor Industries Updates 2024 Outlook
Investing.com — Shares of BE Semiconductor Industries (AS:BESI) updated its 2024 outlook on Thursday, projecting that both revenue and operating profit will be 5% and 10% below consensus estimates, respectively.
> "Besi is experiencing persistent cyclical challenges, with China and automotive cited as more than offsetting growth in computing end markets," noted analysts at Citi Research.
While shipments of hybrid bonding tools are increasing, growth has not met previous projections due to customer delays—primarily from Intel—leading to a wide revenue range for the fourth quarter, expected to be flat quarter-on-quarter with potential fluctuations of +/-10%.
The company reported third-quarter figures slightly ahead of consensus, with revenue and profit exceeding expectations by 3% and 5%, respectively.
> “We seek to understand the nature of the delays and timing of shipment for tools still in backlog. A 7 tool shortfall out of the 15 we model for 4Q24 would align our assessments with the guidance,” stated analysts at Morgan Stanley.
However, the key concern is a disappointing order intake of €152 million, significantly below the consensus estimate of €176 million and a sharp decline from €185 million in the previous quarter.
The company anticipates an uptick in hybrid bonding orders in the fourth quarter, supported by interest in their thermo compression bonding tools, prompting an expansion of production capacity in Malaysia.
Despite the long-term appeal of BE Semiconductor's hybrid bonding solutions, ongoing cyclical challenges and slow technology adoption are likely to continue impacting the company’s shares.
The forecasted slowdown in fourth-quarter performance has raised concerns, with analysts from Citi indicating that this negative trend could further complicate the narrative around BE Semiconductor.
Citi has revised its 2025 revenue estimate to 4% below consensus, suggesting that current projections of a robust 47% revenue growth driven by favorable market conditions and hybrid bonding advancements may be overly optimistic.
Shares of the company were up by 3.7% on Thursday.
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