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Investing.com -- Inficon (SIX:IFCN) shares declined 5% after the company reported second-quarter earnings that missed analyst expectations, citing temporary tariff impacts and production inefficiencies that pressured margins.
The Swiss-based vacuum instrumentation firm posted a 25% year-over-year drop in EBIT to $25 million, falling short of both UBS’s forecast of $28 million and the consensus estimate of $35 million.
Revenue for the quarter came in at $167 million, down 1.9% year over year on a like-for-like basis but up 4.2% sequentially.
The figure landed between UBS’s estimate of $162 million and the $170 million forecast by analysts.
The company’s gross margin fell sharply to 43.1%, a 630-basis-point decline from the previous quarter, which UBS attributed primarily to tariffs and capacity reallocation.
Despite the weaker profitability, Inficon highlighted a positive order trend, with a book-to-bill ratio above 1x, indicating sustained demand.
Semiconductor sales, the company’s key segment, grew approximately 4% quarter over quarter in like-for-like terms to $82 million, aligning with internal and consensus estimates.
The General Vacuum segment also performed above expectations with $42 million in sales, up 17% year over year and 4% quarter over quarter.
However, the Research, Applications & Analysis division was mixed, with strength in battery testing offset by a decline in project-driven security revenue.
Inficon revised its full-year guidance, narrowing its expected revenue range to $660 million, $690 million from $660 million-$710 million previously.
The EBIT margin target was lowered to around 18%, down from an earlier projection of 20%. Based on the midpoint of the new guidance, EBIT for 2025 would total roughly $122 million, about 10% below consensus expectations.
UBS estimates the second half of the year will include an EBIT of $65 million and a margin of 19%, suggesting continued, though reduced, tariff-related margin pressure.
Selling, general and administrative expenses rose only slightly compared with the same quarter a year ago, which analysts described as a mild surprise given broader cost pressures.
While the company acknowledged that gross margin weakness exceeded prior expectations, it also noted that the impact from tariffs and production shifts is expected to ease in the second half of the year.
UBS projected that the drag on margins from tariffs would shrink to around 100 basis points, compared with the 500 basis points observed in the second quarter.
“Consensus is looking for a H2 25E EBIT margin of c20% vs the guidance c19% softening the Q2 margin disappointment somewhat we think,” said analysts at UBS in a note.