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Investing.com -- FormFactor , Inc. (NASDAQ:FORM) reported second-quarter earnings that fell short of analyst expectations despite revenue exceeding forecasts, sending shares plunging 18.2% as the company’s guidance also came in below Wall Street estimates.
The semiconductor testing equipment maker posted adjusted earnings of $0.27 per share for the quarter ended June 28, missing the analyst consensus of $0.30. Revenue came in at $195.8 million, surpassing the $190.17 million analysts had expected, but down 0.8% YoY from $197.5 million in the second quarter of 2024. The company’s shares tumbled following the results, primarily due to the earnings miss and disappointing guidance.
For the third quarter, FormFactor expects revenue of $200 million, plus or minus $5 million, with adjusted earnings projected at $0.25 per share, significantly below the consensus estimate of $0.33 per share.
"FormFactor reported sequentially stronger second-quarter revenue that exceeded the high end of our outlook range, due to higher-than-anticipated growth in our probe-card business," said Mike Slessor, CEO of FormFactor. "Despite this revenue strength, non-GAAP gross margin and overall profitability fell short of our outlook, mainly caused by an unfavorable shift in product mix and unforecasted ramp-up costs for a second HBM DRAM customer."
The company’s adjusted gross margin declined to 38.5% in the second quarter, down from 39.2% in the first quarter and 45.3% in the same period last year. Free cash flow turned negative at -$47.1 million, compared to positive $6.3 million in the first quarter.
FormFactor noted that it is now shipping in volume to all three major HBM manufacturers and has closed the acquisition of its Farmers Branch manufacturing facility, which the company says will provide significant operational flexibility in a lower operating cost region.
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