Amkor Shares Plunge 13% As Q3 Results Miss Estimates, Weak Outlook

(RTTNews) - Shares of Amkor Technology, Inc. (AMKR) plunged more than 13 percent in extended trading on Monday after the semiconductor packaging subcontractor reported results for the third quarter that missed analysts' expectations.

However, the company reported a profit for the quarter that nearly doubled from last year, reflecting improved margins and sales growth. The company also provided earnings and revenue guidance for the fourth quarter, below Street view.

"We delivered record sales this quarter, driven by gains in the mobile device market. Sales grew 6% sequentially and year-over-year, following 10% sequential growth in the second quarter. We had expected even stronger growth in Q3, but fell short of our goal, primarily due to reduced demand for high-end Android smartphones," President and CEO Steve Kelley said in a statement.

The Chandler, Arizona-based company reported net income of $47.10 million or $0.20 per share for the third quarter, higher than $25.35 million or $0.11 per share in the prior-year quarter, which included loss contingency of $0.04 per share.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 6 percent to $812.82 million from $767.99 million in the same quarter last year, but missed three Wall Street analysts' consensus estimate of $843.30 million.

Gross margin for the quarter improved 40 basis points to 18.8 percent from last year's 18.4 percent.

Operating income for the quarter increased to $75.18 million from $58.01 million as total operating expenses declined to $78.04 million from $82.99 million last year.

"Although we saw solid sales growth in the quarter, gross profit remained flat as we invested in our infrastructure ahead of the originally expected higher levels of demand," CFO Joanne Solomon noted.

Looking ahead to fourth quarter, the company expects earnings in a range of $0.07 to $0.17 per share, on projected net sales between $755 million and $805 million and gross margins of 17 to 20 percent. Analysts currently expect the company to post earnings of $0.25 per share on revenues of $859.57 million for the quarter.

For fiscal 2014, the company forecasts net sales in a range of $3.03 billion to $3.08 billion. Street is currently looking for full year-2014 revenues of $3.17 billion.

"Looking ahead to the fourth quarter, we see growth in mobile communications, offset by seasonal declines in the consumer, computing and industrial end markets," Kelly added.

AMKR closed Monday's regular trading session at $7.49, down $0.07 or 0.93% on a volume of 1.26 million shares. The stock plunged a further $0.99 or 13.22% in after-hours trading.