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Amkor Technology, Inc. (AMKR - Free Report) reported fourth-quarter 2020 earnings of 52 cents per share, beating the Zacks Consensus Estimate of 37 cents. The figure improved 26.8% from the year-ago quarter and 36.8% from third-quarter 2020.
Revenues of $1.37 billion surpassed the Zacks Consensus Estimate by 5.5%. The figure improved 16.3% year over year and 1.5% sequentially.
The top-line growth was driven by better-than-expected demand for smartphones and automotive products.
Following fourth-quarter results, shares of Amkor gained 7.8%.
The company’s strengthening momentum across 5G, advanced automotive systems, IoT wearables and high-performance computing on the heels of robust advanced packaging technologies is likely to drive its financial performance in the days ahead.
Further, the company’s focus on shareholders’ returns is expected to help the stock rebound in the near term.
Amkor Technology, Inc. Price, Consensus and EPS Surprise
Advanced Products — which includes flip chip scale packages, wafer-level chip scale packages and flip chip ball grid array packages — accounted for 63.3% of fourth-quarter revenues. Revenues improved 30.1% year over year to $868 million.
Mainstream Products — which includes lead frame packages, substrate-based wire bond packages and MEMS packages — accounted for the remaining 36.7% of fourth-quarter revenues. Revenues declined 1.6% year over year to $503 million.
End-Market Details
The Communications market generated 46% of its total revenues. The Consumer market generated 19% of the company’s revenues during the reported quarter. The Automotive, Industrial & Other market generated 19% of the company’s revenues for the fourth quarter, while Computing accounted for 16%.
Management stated that the demand for advanced packages — particularly advanced SiP — drove growth in consumer, communications and computing end markets.
Operating Details
Per management, gross margin of 20.3% expanded 250 basis points (bps) from the year-ago quarter.
Operating expenses of $119.3 million increased 14.1% year over year. As a percentage of revenues, the figure contracted 20 bps year over year.
Operating margin was 11.6%, which expanded 160 bps from the prior-year quarter.
Balance Sheet
At fourth quarter-end, cash and short-term investments were $832 million compared with $922.9 million in the prior quarter.
Further, total debt was $1.15 billion at fourth quarter-end, down from $1.3 billion at third quarter-end. Net debt was $322 million for the reported quarter versus $396 million in the prior quarter.
Guidance
For first-quarter 2021, Amkor expects revenues of $1.27-$1.37 billion.
Gross margin is expected to be 17-20%.
Further, earnings are expected to be 29-48 cents per share.
Long-term earnings growth for Semtech, JD.com, and Microchip Technology is currently projected at 12.5%, 51.2% and 14.9%, respectively.
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Image: Bigstock
Amkor (AMKR) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Amkor Technology, Inc. (AMKR - Free Report) reported fourth-quarter 2020 earnings of 52 cents per share, beating the Zacks Consensus Estimate of 37 cents. The figure improved 26.8% from the year-ago quarter and 36.8% from third-quarter 2020.
Revenues of $1.37 billion surpassed the Zacks Consensus Estimate by 5.5%. The figure improved 16.3% year over year and 1.5% sequentially.
The top-line growth was driven by better-than-expected demand for smartphones and automotive products.
Following fourth-quarter results, shares of Amkor gained 7.8%.
The company’s strengthening momentum across 5G, advanced automotive systems, IoT wearables and high-performance computing on the heels of robust advanced packaging technologies is likely to drive its financial performance in the days ahead.
Further, the company’s focus on shareholders’ returns is expected to help the stock rebound in the near term.
Amkor Technology, Inc. Price, Consensus and EPS Surprise
Amkor Technology, Inc. price-consensus-eps-surprise-chart | Amkor Technology, Inc. Quote
Revenues in Terms of Product Lines
Advanced Products — which includes flip chip scale packages, wafer-level chip scale packages and flip chip ball grid array packages — accounted for 63.3% of fourth-quarter revenues. Revenues improved 30.1% year over year to $868 million.
Mainstream Products — which includes lead frame packages, substrate-based wire bond packages and MEMS packages — accounted for the remaining 36.7% of fourth-quarter revenues. Revenues declined 1.6% year over year to $503 million.
End-Market Details
The Communications market generated 46% of its total revenues. The Consumer market generated 19% of the company’s revenues during the reported quarter. The Automotive, Industrial & Other market generated 19% of the company’s revenues for the fourth quarter, while Computing accounted for 16%.
Management stated that the demand for advanced packages — particularly advanced SiP — drove growth in consumer, communications and computing end markets.
Operating Details
Per management, gross margin of 20.3% expanded 250 basis points (bps) from the year-ago quarter.
Operating expenses of $119.3 million increased 14.1% year over year. As a percentage of revenues, the figure contracted 20 bps year over year.
Operating margin was 11.6%, which expanded 160 bps from the prior-year quarter.
Balance Sheet
At fourth quarter-end, cash and short-term investments were $832 million compared with $922.9 million in the prior quarter.
Further, total debt was $1.15 billion at fourth quarter-end, down from $1.3 billion at third quarter-end. Net debt was $322 million for the reported quarter versus $396 million in the prior quarter.
Guidance
For first-quarter 2021, Amkor expects revenues of $1.27-$1.37 billion.
Gross margin is expected to be 17-20%.
Further, earnings are expected to be 29-48 cents per share.
Zacks Rank & Stocks to Consider
Amkor currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Semtech Corporation (SMTC - Free Report) , JD.com, Inc. (JD - Free Report) and Microchip Technology Incorporated (MCHP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Semtech, JD.com, and Microchip Technology is currently projected at 12.5%, 51.2% and 14.9%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>