Tower Semiconductor (TSEM) Tops Q1 EPS by 1c, Revenues Beat; Offers 2Q Revenue Guidance Above Consensus

May 13, 2020 7:33 AM EDT

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Tower Semiconductor (NASDAQ: TSEM) reported Q1 EPS of $0.20, $0.01 better than the analyst estimate of $0.19. Revenue for the quarter came in at $300.17 million versus the consensus estimate of $297.57 million.

First Quarter Results Overview

  • Revenues for the first quarter of 2020 were $300 million, reflecting 10% year over year organic revenue growth (organic revenues are defined as total revenue excluding revenues from Panasonic in the TPSCo fabs and revenues from Maxim in the San Antonio fab).
  • Gross and operating profits for the first quarter of 2020 were $53 million and $16 million, respectively; the 10% year over year organic revenue growth and efficiencies enabled the company to mitigate 55% of the impact in gross and operating profits resulting from Panasonic renewed contract revenue reduction. EBITDA for the first quarter of 2020 was $73 million; Net profit for the first quarter of 2020 was $17 million, or $0.16 basic and diluted earnings per share.
  • Cash flow generated from operations in the first quarter of 2020 was $68 million. Investment in fixed assets, net was $63 million in the first quarter of 2020 and included payments related to the previously announced 300mm fab capex investment, to support current customer demand increase, with additional planned shipments beginning the third quarter of 2020. In the first quarter of 2020, the company repaid $24 million of its debt.
  • Shareholders' equity as of March 31, 2020 was a record of $1.36 billion, reflecting 70% from total assets.

Mr. Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, commented, “We began 2020 with a pandemic that has grown worldwide, vastly impacting the global business and economic environment. COVID-19 has created new and considerable hurdles, forcing us, together with the entire world, to modify and implement a new mode of life, and with that, a different mode of work. We remain proactive on all fronts with respect to the health and safety of our employees, operational and supply chain management and our customers with an even increased communication, to maximize every 'wafer of opportunity' - providing reliable short- and long-term technology and manufacturing solutions in response to their changing needs.”

Ellwanger further commented: “Updated customer forecasts continue to show quarter over quarter growth through the year. As a well experienced, mature, strong global company – with an exceptional base of talented and most dedicated employees - we remain committed to our customer partnerships, towards long-term mutual growth, working through any short-term challenges.”

GUIDANCE:

Tower Semiconductor sees Q2 2020 revenue of $310 million, versus the consensus of $308.1 million.

  • Tower Semiconductor expects revenues for the second quarter of 2020 to be $310 million, with an upward or downward range of 5%.

For earnings history and earnings-related data on Tower Semiconductor (TSEM) click here.



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