Amkor Technology, Inc. AMKR reported first-quarter 2017 adjusted loss of 4 cents per share, greater than the Zacks Consensus Estimate of a loss of 3 cents.
However, in the last one year, shares of Amkor outperformed the Zacks categorized Electronics Semiconductors industry. While the industry gained 51.1%, the stock returned 103.8%.
Revenue
Revenues of $914 million were up 5.2% year over year. The increase was driven by strength in all its end markets, except the smartphone market which witnessed a seasonal slowdown in the first quarter.
The top line was within the company’s guidance of $860–$940 million and came in above the Zacks Consensus Estimate of $900 million.
Revenues by Product Lines
The revenue mix in terms of product linesis discussed below.
Advanced Productsinclude flip chip scale packages, wafer-level chip scale packages and flip chip ball grid array packages. It accounted for approximately 42% of first-quarter revenues. Revenues were down 15.1% sequentially but up 7.6% year over year.
Mainstream productsinclude lead frame packages, substrate-based wirebond packages and MEMS packages. It accounted for the remaining 58% of first-quarter revenues. Revenues were down 7.1% sequentially but up 3.5% year over year.
Margins
Gross margin was 15.6%, up 150 basis points (bps) from the year-ago quarter. The increase was due to higher revenues and a favorable mix.
Non-GAAP operating expenses of $118.3 million increased 17.3% year over year. As a percentage of sales, selling, general and administrative expenses decreased, while research and development expenses increased.
As a result, pro forma operating margin was 2.7%, up 20 bps year over year.
Net Income
Amkor generated first-quarter net income of ($10) million compared with ($0.875) million in the year-ago quarter. There were no one-time items in the fourth quarter. Therefore, the GAAP loss per share was the same as the pro forma loss of 4 cents compared with 0 cent in the year-ago quarter.
Balance Sheet & Cash Flow
During the reported quarter, cash flow from operations was $103 million compared with $238 million in the prior quarter. Capex was $88 million against $168 millionin the prior quarter.
Total cash, cash equivalents and restricted cash were $616 million in the first quarter, up from $551.5 billion in the prior quarter.
2Q Guidance
For the second quarter, Amkor expects revenues in the range of $955–$1.035 billion, up 5% to 13% sequentially. The Zacks Consensus Estimate is pegged at $954.04 million.
Gross margin is expected within 16–20%. Earnings per share are expected within 36–52 cents on a GAAP basis. The guidance also includes proceeds from the sale of the company’s K1 factory.