On the call today are Gideon Argov, President and CEO; Bertrand Loy, Chief Operating Officer; and Greg Graves, Chief Financial Officer. Gideon will now begin the call.
Thank you, Steve, and good evening, and thank you for joining the call. After reaching record levels in the second quarter, our third quarter revenue of $173 million declined 17% sequentially and those below guidance as semiconductor production and capital spending flowed through the quarter across much of the industry. Despite the softening trends in the industry, there were several bright spots. Sales were strong at the advanced nodes as we continue to win key nominations on new platforms. We executed well both operationally and financially achieving cash EPS of $0.17 per share and an adjusted operating margin of 16.5%, both in line with our target operating model. And we generated $50 million in cash from operations for the quarter.
In terms of Q3 sales, our semiconductor business clearly felt the impact of lower industry capital spending and reductions in fab utilization and output. While the slowdown was not surprising, the magnitude of the reductions in customer fab utilization proved to be more than anticipated as our unit-driven sales declined 15% from the second quarter. Demand for our liquid filtration products weakened particularly for older process nodes. Many foundry and memory customers operated their legacy fabs at utilization rates of 70% and in some cases, even lower in order to work down inventory levels. In addition, sales of filters were also impacted by the drop in OEM shipments of liquid tools such as wet etch and clean tools and photolithography track systems. Shipments of these tools tend to require purchases of liquid filters in order to get them up and running. These trends were in contrast to demand from logic makers, which grew during the quarter.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV