Amkor Technology (AMKR Quick QuoteAMKR - Free Report) reported third-quarter 2026 earnings of 76 cents per share, missing the Zacks Consensus Estimate by 3.8%. Earnings rose 49% from 51 cents a year ago, reflecting a richer mix of high-value packaging despite weakness in Communications.

Net sales of $1.99 billion increased 0.2% year over year but missed the Zacks Consensus Estimate by 1.34%. Computing revenues climbed 25% sequentially to a record as the company scaled its high-density fan-out (HDFO) CPU program.

AMKR's Q3 Product Mix Shifts

Advanced products generated $1.63 billion in third-quarter sales, down 3.1% from $1.68 billion a year earlier. Mainstream products contributed $359 million, up 18.5% from $303 million. Advanced products include flip-chip, memory and wafer-level processing services, while mainstream offerings primarily comprise wirebond packaging and related testing.

Packaging services accounted for 88% of sales, down from 89% in the year-ago quarter, while test services represented 12%, up from 11%. Revenue concentration eased as the top 10 customers contributed 66% of sales compared with 73% a year earlier.

Amkor Technology, Inc. Price, Consensus and EPS Surprise

Amkor Technology, Inc. price-consensus-eps-surprise-chart | Amkor Technology, Inc. Quote

Amkor's End Markets Show Diverging Trends

Computing represented 26% of quarterly sales versus 19% a year ago. Revenues in this market grew 37% year over year, supported by data center demand and the HDFO CPU ramp. An additional HDFO CPU program for a hyperscaler began ramping during the quarter. Two new 2.5D programs for networking and data centers are expected to start ramping in the fourth quarter.

Automotive and Industrial also posted 37% year-over-year revenue growth, accounting for 22% of sales versus 16% last year. Demand for advanced driver-assistance systems, in-car computing and industrial applications drove a 7% sequential increase.

Communications contributed 37% of revenues, down from 51% a year ago, and sales fell 8% sequentially. The transition of system-in-package (SiP) production to Vietnam, memory constraints and changes in customer build patterns weighed on demand. Consumer sales rose 10% sequentially, although component shortages affected premium smartphones and wearables.

AMKR's Margins Widen on Richer Packaging Mix

Gross profit increased 27.8% year over year to $363.5 million. Gross margin expanded 400 basis points to 18.3%, aided by stronger Computing and Automotive contributions. Lower material costs as a percentage of sales helped, although foreign-exchange pressures and the July earthquake at Amkor's Japan facility reduced the sequential margin by approximately 60 basis points.

Operating expenses totaled $138.8 million, up from $125.6 million a year ago. Operating income rose 41.4% to $224.7 million, lifting operating margin to 11.3% from 8%. Net income attributable to Amkor increased 50.6% to $190.6 million. EBITDA, a non-GAAP measure, reached $435 million compared with $340 million a year earlier.

AMKR's Balance Sheet & Cash Flow Details

As of Sept. 30, 2026, Amkor held $2.4 billion in cash and short-term investments against $2.5 billion in total debt. Liquidity totaled $3.4 billion, and debt was 1.7 times trailing 12-month EBITDA. The company repurchased approximately $32 million of shares during the quarter.

For the first nine months of 2026, operating cash flow reached $868.3 million versus $451.1 million in the year-ago period. Payments for property, plant and equipment increased to $1.24 billion from $472.5 million, reflecting a stepped-up investment cycle.

AMKR's Q4 Outlook Balances Growth and Weakness

For the fourth quarter of 2026, management expects revenues between $1.9 billion and $2 billion, gross margin of 18% to 19% and net income of $160 million to $185 million. Earnings are forecast at 65-75 cents per share.

Computing revenues are projected to grow at a low-double-digit sequential rate, while Automotive and Industrial should advance at a low-single-digit rate. Communications revenues are expected to decline by a high-single-digit percentage, with Consumer sales falling by a mid-teens percentage amid continuing component shortages. Management expects Computing to grow more than 50% year over year in the fourth quarter and more than 30% for 2026 overall.

Amkor's Global Packaging Expansion Accelerates

Amkor narrowed its full-year 2026 capital spending forecast to approximately $2.5 billion. Management anticipates higher expenditures in 2027 as it expands capacity in Arizona, Korea and Vietnam, with customer advance payments supporting investment.

The company's two Arizona campus phases entail an estimated $12 billion investment and more than 90,000 square meters of clean-room space. Phase 1 construction remains on track for completion by the end of 2027, while Phase 2 is slated to break ground in late 2027. In Korea, new facilities will support advanced packaging for data center customers. Management said agreements involving advance payments have been executed with about a dozen customers, improving visibility into future capacity needs.

AMKR’s Zacks Rank & Stocks to Consider

Amkor currently carries a Zacks Rank #3 (Hold).

ASE Technology (ASX Quick QuoteASX - Free Report) , Fortinet (FTNT Quick QuoteFTNT - Free Report) and Microchip (MCHP Quick QuoteMCHP - Free Report) are among the better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Currently, ASE Technology sports a Zacks Rank #1 (Strong Buy), while Fortinet and Microchip carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

ASE Technology’s shares have surged 147.9% year to date. ASX is scheduled to report its third-quarter 2026 results on Oct. 29.

Fortinet’s shares have climbed 130.9% year to date. FTNT is slated to report its third-quarter 2026 results on Oct. 28.

Microchip’s shares have gained 19.2% year to date. MCHP is scheduled to report its fiscal second-quarter 2027 results on Nov. 5, 2026.