CVD Equipment: CVD Equipment Stock Down Despite Y/Y Uptick in Q4 Earnings, Revenues

In This Article: Shares of CVD Equipment Corporation CVV have lost 3.5% since the company reported earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 Index's 1% gain over the same time frame. Over the past month, the stock has gained 5.9% against the S&P 500's 5% decline, reflecting a degree of resilience in a broader market downturn. Find the latest EPS estimates and surprises on Zacks Earnings Calendar. Quarterly Revenue and Earnings Performance CVD Equipment posted fourth-quarter 2024 revenues of $7.4 million, an 80.3% increase from $4.1 million in the prior-year period, though slightly below the $8.2 million recorded in the third quarter of 2024. The sharp year-over-year revenue growth was driven primarily by a $2.8 million increase in the CVD Equipment segment and a $0.5 million rise in the SDC segment, which benefited from solid demand for gas delivery systems. Net income for the quarter was $132,000 or $0.02 per share against a net loss of $2.3 million or $0.33 per share in the fourth quarter of 2023. Gross profit came in at $2 million, reflecting a margin of 27.3% against a gross loss of $348,000 in the year-ago period. The improvement was partly offset by a $300,000 non-cash charge to adjust PVT150 inventory valuation, following a $1 million charge in the prior quarter. Operating income was $35,000 against an operating loss of $2.5 million a year earlier. For full-year 2024, revenues rose 11.5% to $26.9 million from $24.1 million in 2023. The company narrowed its net loss to $1.9 million or $0.28 per share, from $4.2 million or $0.62 per share in 2023. CVD Equipment Corporation Price, Consensus and EPS Surprise CVD Equipment Corporation Price, Consensus and EPS Surprise CVD Equipment Corporation price-consensus-eps-surprise-chart | CVD Equipment Corporation Quote Order Activity and Backlog Support Growth Outlook Fourth-quarter orders totaled $7.1 million, driven by continued demand in both the CVD and SDC segments. Among these was a $3.5 million follow-on order for the CVI/CVD3500 system from an existing aerospace customer. Full-year orders rose 8.9% to $28.1 million from $25.8 million in 2023, with strength in aerospace and industrial markets. The year-end backlog increased 4.9% to $19.4 million from $18.4 million, reflecting steady customer interest despite a volatile macroeconomic and geopolitical backdrop. Management acknowledged that order and revenue levels may continue to fluctuate due to the nature of the emerging growth markets it serves. Segment Performance and Key Business Metrics The CVD Equipment segment drove most of the quarterly revenue increase, benefiting from aerospace and industrial contract activity. The SDC segment also posted a 28.8% year-over-year rise in revenues in the fourth quarter of 2024, supported by persistent demand for gas delivery systems. CVD Equipment Corporation Price, Consensus and EPS Surprise Gross margin for the year improved to 23.6% from 21%, despite the $1.3 million full-year inventory write-down on PVT150 systems. Management attributed the improvement to a favorable contract mix, higher volumes and reduced first-article inefficiencies. Operating loss for 2024 was trimmed to $2.4 million from $4.9 million in 2023, aided by $717,000 in gains from the sale of equipment-largely related to the discontinued MesoScribe operations. Cash and cash equivalents were $12.6 million at year-end compared with $14 million a year earlier. Working capital was $13.9 million, down slightly from $14.3 million. Management Commentary CEO Emmanuel Lakios emphasized CVV's progress in navigating complex market conditions. He noted that the fourth quarter marked the second consecutive quarter of positive net income and reiterated the company's commitment to long-term profitability and cash flow generation. CFO Richard Catalano acknowledged the challenges of inflation and tariff-related supply chain costs but expressed confidence in the company's cash position and cost control efforts. The silicon carbide market, particularly for 150 mm wafers, remains a headwind due to global overcapacity and declining wafer prices. However, CVV continues to support its installed base and pursue opportunities for its larger PVT200 systems. While customers are evaluating the PVT200's performance, management noted that future orders will depend heavily on broader market recovery and capacity needs. Guidance While no formal guidance was issued, management signaled that fluctuations in orders and revenues are likely to persist due to the emerging nature of its target markets. CVV continues to monitor macroeconomic and geopolitical risks, including potential tariffs that could adversely impact the supply chain and component costs in 2025. Strategic investments in R&D and sales are ongoing to position the company for long-term growth and profitability. Other Developments In 2024, CVV discontinued its MesoScribe product line to concentrate resources on its core CVD and SDC businesses. The company also completed the sale of Tantaline in May 2023, which contributed to a $0.5 million year-over-year revenue decline in that segment. These moves reflect CVD Equipment's strategic effort to streamline operations and focus on high-growth end markets such as aerospace and defense, microelectronics and energy storage. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CVD Equipment Corporation (CVV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research