Amkor Shares Rise As Q3 Results Top Estimates; Guides Q4 In Line

(RTTNews) - Shares of Amkor Technology, Inc. (AMKR) rose nearly four percent after the semiconductor packaging subcontractor reported Monday results for the third quarter that topped analysts' expectations. Profit for the quarter also increased from last year, reflecting improved margins and double-digit sales growth. The company also provided earnings and sales guidance for the fourth quarter, in line with Street view.

"Third quarter sales were up 10% year-over-year and 3% sequentially. Excluding the power discrete business, which was not included in our guidance, third quarter sales were consistent with the midpoint of our expectations," President and CEO Steve Kelley said in a statement.

The Chandler, Arizona-based company reported net income of $25.3 million or $0.11 per share for the third quarter, compared to $22.3 million or $0.11 per share in the prior year quarter.

The company noted that the results for the latest quarter was adversely impacted by about $0.04 per share of loss contingency.

Excluding the items, adjusted net income for the quarter was $35.0 or $15 per share. On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 10.4 percent to $768.0 million from $695.4 million in the same quarter last year, and topped three Wall Street analysts' consensus estimate of $737.03 million.

Gross margin for the quarter improved 160 basis points to 18.4 percent from last year's 16.8 percent.

"We are seeing particular strength in the NAND Flash market, where revenues grew over 25% sequentially. In addition, the gross margin performance of our mainstream wirebond business improved in the third quarter due to increased utilization, efficiency improvements and lower gold wire cost," Joyce added.

Looking ahead to fourth quarter, the company expects earnings in a range of $0.08 to $0.19 per share, on projected net sales between $730 million and $780 million and gross margins of 17 to 20 percent. Analysts currently project earnings of $0.11 per share on quarterly revenues of $736.0 million.

The company added that fourth-quarter sales are expected to be slightly down sequentially. The company expects to benefit from a full quarter of results from the recently acquired power discrete business in Malaysia, but will be offset by seasonal declines in the consumer and computing end markets.

AMKR closed Monday's regular trading session at $4.83, up $0.06 or 1.26% on a volume of 1.16 million shares. The stock gained a further $0.17 or 3.52% in after-hours trading.