Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) today reported good second quarter results. Revenue totaled $236 million, mainly as a result of 35% organic sales growth (All the company's customers except for Micron and Panasonic).
Tower's growth pushed up its profit, compared with the second quarter of last year, mainly as a result of replacing its sales to Micron from its fab in Nishiwaki by sales to other customers with higher profit margins.
Tower's second quarter sales were higher than its NIS 226 million sales in the first quarter and its NIS 234 million sales in the corresponding quarter last year.
Non-GAAP gross profit amounted to $87 million, 37% of sales, up 40%, compared with $62 million, 27% of sales, in the second quarter of 2014, and $81 million, 36% of sales, in the preceding quarter.
In the bottom line, Tower reported a non-GAAP net profit of $54 million in the quarter, $0.70 per share, a 74% jump, compared with a $31 million net profit, $0.62 per share, in the corresponding quarter last year, and up 9%, compared with a $50 million profit in the preceding quarter.
Second quarter GAAP profit amounted to $8 million, $0.10 per share, compared with a $16 million net loss, $0.31 per share, in the second quarter of 2014.
Strong momentum
Tower management expects $244 million in sales in the third quarter, plus or minus 5%, reflecting further growth of 8%, compared with the third quarter of 2014.
Tower CEO Russell Ellwanger said, "Second quarter was strong, producing sustainable net profit, the highest ever quarterly revenue and record EBITDA; tracking ahead of our financial roadmap. Second quarter year over year organic growth of 35%, strongly outperformed our industry, demonstrating the traction of the mask sets entries, as previously reported."
Ellwanger continued, "We expect continued quarter over quarter revenue, margins and profit growth. Our customer demand, within existing and new markets, provides strong confidence to maintain and grow our analog specialty foundry leadership position.”
Interviewed by "Globes," Ellwanger commented, "We have strong momentum and strong figures. From this quarter onwards, we expect to make a GAAP profit in the coming quarters. That is a very significant achievement for us, and we see it in the profit and revenue figures, and in every parameter. Our momentum was very strong in the second quarter, and we expect the positive momentum to continue in the coming quarters."
"Globes": What about acquisitions?
Ellwanger: "We're planning to focus on organic growth in the coming years. There was speculation about our acquisitions, but obviously, we're always looking for opportunities. However, right now, we're focusing on boosting our profit and internal indices. We'll always try to take advantage of our reputation to make successful acquisitions."
Is it possible to speak of a $50 million GAAP profit in 2016?
"As I said, we'll continue to report a GAAP profit in the coming quarters, and we said that annual revenue would cross the $1 billion mark. I don't want to commit myself to a specific number, but that's the direction."
Published by Globes [online], Israel business news - www.globes-online.com - on August 5, 2015
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