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Amkor Technology (AMKR) Up 12.5% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Amkor Technology (AMKR - Free Report) . Shares have added about 12.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amkor Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Amkor Technology, Inc. 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.
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.
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. T
Gross margin is expected to be 17-20%.
Further, earnings are expected to be 29-48 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 90% due to these changes.
VGM Scores
At this time, Amkor Technology has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Amkor Technology has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Amkor Technology (AMKR) Up 12.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Amkor Technology (AMKR - Free Report) . Shares have added about 12.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amkor Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Amkor Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Amkor Technology, Inc. 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.
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.
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. T
Gross margin is expected to be 17-20%.
Further, earnings are expected to be 29-48 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 90% due to these changes.
VGM Scores
At this time, Amkor Technology has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Amkor Technology has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.