ChipMOS (IMOS) Tops Q4 EPS by 22c, Sales Miss

ChipMOS (NASDAQ: IMOS) reported Q4 EPS of $0.63, $0.22 better than the analyst estimate of $0.41. Revenue for the quarter came in at $183.4 million versus the consensus estimate of $188.35 million.

S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS, said, "2014 was a strong year for ChipMOS, as we outgrew the broader semiconductor industry, achieved impressive growth in profitability and free cash flow, and executed the long-term initiatives designed to ensure the Company's continued success. Our core strategy of focusing on higher margin segments and serving customers we can support and grow with continues to pay off for the Company. We are pleased with our market position and the profile of our customer base, which is both diverse and boasts numerous industry leaders. This has positioned ChipMOS to further benefit from a favorable revenue mix, which we believe is sustainable over the coming quarters. We remain very positive about opportunities in our higher margin LCD driver and memory assembly and test businesses, and have added confidence based on stability in the other segments we serve. As previously discussed, we had an opportunity to increase our CapEx investments in the fourth quarter, based on customer demand levels and in order to put the appropriate resources in place needed for 2015. We invested a majority of our CapEx in our LCD driver business. This directly reflects our confidence in the business and in our customers, which led to an 89% utilization level in the LCD segment in the fourth quarter, even after we added on the additional capacity. We are well positioned to take advantage of further growth, and expect to also benefit from a stable pricing market environment and further industry capacity rationalization. From a structural standpoint, we achieved several major milestones in 2014, including the listing of our subsidiary, ChipMOS Taiwan, on the Taiwan Stock Exchange ("TWSE") on April 11, 2014. ChipMOS Taiwan subsequently announced a proposal to merge with ThaiLin on November 12, 2014. The required greater than 50% of shareholders of both ChipMOS Taiwan and ThaiLin voted in person or by proxy to approve the proposed merger of the two ChipMOS' subsidiaries on December 30, 2014. We are pleased with our continued progress and expect to build on our business momentum in 2015 to the benefit of the Company, and our shareholders, as we drive further improvements in our business performance and additional streamlining of our organizational structure."

First Quarter 2015 Outlook

The Company expects first quarter of 2015 revenue to decrease approximately 8% to 12%, as compared to the fourth quarter of 2014, primarily reflecting seasonality in LCD driver for small panels and memory products. The Company expects gross margin on a consolidated basis to be in the range of approximately 21% to 24% for the first quarter of 2015. The Company anticipates depreciation and amortization expenses for the first quarter of 2015 to be approximately US$24 million. Operating expenses are expected to be approximately 6% to 8% of revenues in the first quarter of 2015. The Company expects CapEx spending to be approximately US$37 million in the first quarter of 2015, with CapEx spending for the full year 2015 to be less than US$125 million. The total number of the Company's outstanding common shares at the end of the first quarter of 2015 is expected to be approximately 29 million.

For earnings history and earnings-related data on ChipMOS (IMOS) click here.

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