MagnaChip (MX) Tops Q2 EPS by 7c, Beats on Revenues

MagnaChip (NYSE: MX) reported Q2 EPS of $0.23, $0.07 better than the analyst estimate of $0.16. Revenue for the quarter came in at $199.7 million versus the consensus estimate of $185 million.

Q2 2018 Summary

• Revenue of $199.7 million exceeded high-end of guidance range of $182-188 million; revenue increased 19.8% Year-over-Year (YoY)
• Record OLED display driver revenue of $62.2 million quadrupled YoY and increased 81.3% from Q1 2018
• Power products revenue increased 13.3% YoY; Foundry revenue decreased 0.8% YoY on a reported basis, but had better product mix with 17% increase in new products YoY
• Gross profit margin of 27.0% in line with 26-28% guidance range; gross profit margin declined by one percentage point YoY and gross profit dollars increased 15.4% YoY
• Operating income of $13.9 million increased 42.8% YoY
• Adjusted EBITDA of $23.5 million increased 15.7% YoY
• Cash flow from operations of $25.7 million up fivefold YoY; free cash flow, which represents cash flow from operations less capital expenditures, totaled $17.3 million as compared with a negative $0.2 million a year ago

CEO Comments from YJ Kim: "Revenue in the second quarter far exceeded previous guidance due to record demand for our OLED display drivers coupled with a higher-than-expected number of launches of OLED smartphones, primarily in China. Our OLED revenue in Q2 quadrupled from the second quarter a year ago and increased 81.3% sequentially. Given our current business visibility, OLED revenue in 2018 is expected to exceed the previous record of $161.0 million set in 2016. Revenue in the Power standard products business increased by double digits year-over-year, while new product revenue in our Foundry business increased by 17% year over year. Both Foundry and Power businesses recorded a sequential increase in revenue in Q2 as compared to Q1 2018."

CFO Comments from Jonathan Kim: "Key financial metrics showed continued improvement in the second quarter, driven primarily by higher-than-expected revenue. Revenue, gross profit dollars, operating income and Adjusted EBITDA, all showed double-digit percentage gains year-over-year, as well as sequentially. Operating income, Adjusted EBITDA and gross profit increased 88.6%, 51.7%, and 20.8% sequentially, and the Company remains committed to show improvement in gross profit over time. Our improved financial performance helped MagnaChip achieve positive free cash flow of $17.3 million in the second quarter as compared to negative free cash flow in the same year-ago period. We anticipate that we will continue to generate positive free cash flow for the second half of 2018."

For earnings history and earnings-related data on MagnaChip (MX) click here.

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