Amkor Technology Profit Down, Outlook Weak; Shares Tank 14%

(RTTNews) - Semiconductor packaging company Amkor Technology Inc. (AMKR), Monday reported a plunge in profit for the second quarter, as revenues declined and margins narrowed. The bottom line was also impacted by a debt extinguishment charge.

Shares of the company fell about 14 percent in extended hours after results missed Wall Street expectations, while detailing a poor third-quarter outlook.

Chandler, Arizona-based Amkor's second-quarter profit dropped to $9.6 million or $0.04 per share from $49.5 million or $0.21 per share last year.

Analysts polled by Thomson Reuters expected earnings of $0.11 per share for the second quarter. Analysts' estimates typically exclude special items.

Results for the quarter include a $0.04 per share charge for the early extinguishment of debt, while last year's results included a gain of $0.08 per share related to the sale of Amkor's Japanese subsidiary.

Net sales for the second quarter dropped to $736.7 million from $767.5 million a year ago. Analysts had a consensus revenue estimate of $746.75 million for the second quarter.

Gross margins for the quarter dropped to 15.6 percent from 19.6 percent last year.

Commenting on the results, CEO Steve Kelley said, "Profitability was constrained due to lower revenues and a weaker product mix."

"We expect sluggish mobile device market conditions to persist through most of Q3, with revenues slightly down compared with Q2," added Kelley.

Looking forward to the third quarter, Amkor expects a net loss of $0.03 per share to net income of $0.06 per share and sales of $700 million to $750 million. Analysts currently expect earnings of $0.17 per share on revenues of $795.87 million for the third quarter.

AMKR closed Monday's trading at $5.035, on the Nasdaq. The stock, however, dropped $0.70 or 14.23%, in the after-hours trade.