This tech services company beat analysts’ estimates by $0.06 per share last quarter.
Amkor Technology, Inc. (AMKR)
From Technology & Opportunity
Amkor Technology, Inc. (AMKR) is one of the world’s largest providers of outsourced semiconductor packaging and test services. Amkor was founded in 1968, introducing the outsourced packaging model to the tech industry over four decades ago. Today, Amkor partners with more than 250 of the world’s leading semiconductor companies, foundries, and electronics OEMs.
Amkor reported fourth-quarter 2017 results on February 12, 2018. The company ended 2017 on a strong note, delivering total revenue of $1.1 billion. Over the last five years, Amkor has managed to deliver a revenue growth rate of 8.4% a year. Earnings per share came in at $1.09 for the fiscal year, marking a 58% increase from the previous year. This is just another demonstration of Amkor’s consistent ability to increase earnings per share every year, with an EPS growth rate of 24.3% a year.
The company closed the 2017-year with cash equivalents of $596.4 million. Amkor also decreased its debt, laying a healthier financial foundation for 2018. Sales were notably up over the course of the year. Amkor broke new sales records, delivering sales numbers 8% higher than sales in 2016. Sales in Amkor’s communications division were up 11%, accounting for 43% of total sales. Amkor’s Automotive and Industrial sales increased 6%, bringing in 26% of yearly sales.
Amkor saw sales in China increase by 60% year-over-year. These sales were largely dependent on an increased demand for Amkor’s Advanced Packages. In its earnings press release, Amkor emphasized that the company’s investments in capacity, capability, and engineering talents continued to deliver returns to Amkor. Furthermore, the company’s integration with NANIUM, a leader in wafer-level fan-out technology Amkor acquired in 2017, is now complete. This should help the company add to its products in 2018, offering customers a choice of two world-class fan-out manufacturing lines: one in Portugal and one in Korea.
Heading into 2018, Amkor hopes to continue to increase revenue. To increase revenue, Amkor is going to continue to engage with a wide range of markets and regions. This approach paid off handsomely in 2017 and will likely pay out in 2018. The company expects revenue for 2018 to be just over $1 billion and increase 12% year over year.
2017 marks Amkor’s 50th year in existence, making Amkor a fairly old and established company in the semiconductor space. Looking forward, we are feeling confident in Amkor heading into 2018. The company is poised to deliver more growth by targeting new markets and expanding its hold on existing markets.
We rate Amkor Technology, Inc. a “Buy” under $12.25. The risk level is “Medium-Low”
Jason Stutman, Technology & Opportunity, www.angelpub.com, 877-303-4529, February March 2018