“We incurred approximately $13 million of incremental earthquake costs that reduced gross margin by 150 basis points and earnings per diluted share by $0.04,” said Joanne Solomon, Amkor’s executive vice president and chief financial officer. “Taking into account insurance payments anticipated later this year, we expect the net impact of the Japan earthquakes on our full year 2016 results to be minimal."
Business Outlook
"Looking ahead to Q3, we expect that revenues will increase around 15% sequentially, driven by the launch of mobile devices across multiple tiers. We expect robust growth in advanced SiP, Greater China and automotive," said Kelley.
Third quarter 2016 outlook (unless otherwise noted):
- Net sales of $1.01 billion to $1.09 billion, up 10% to 19% from the prior quarter
- Gross margin of 16% to 20%
- Net income of $29 million to $65 million, or $0.12 to $0.28 per share
- Full year 2016 capital expenditures of around $650 million, unchanged from our previous forecast
Revision to Previously Reported Financial Information
In the second quarter of 2016, during our post-acquisition integration of J-Devices, we identified an error in the provision for income taxes in the financial statements for J-Devices for the periods beginning in 2012 through the fourth quarter of 2015. During those periods we did not control J-Devices and, accordingly, we accounted for our investment in J-Devices using the equity method. As a result of the J-Devices error, our equity in earnings of J-Devices was overstated by the cumulative amount of $8.0 million. We believe that the error is not material to Amkor for the periods impacted and have elected to revise our previously issued consolidated financial statements in our upcoming filings to correct prior periods. We have also recorded the impact of the revision in our purchase accounting for the acquisition of J-Devices on December 30, 2015. Periods presented herein are based on the revised financial results for the three and six months ended June 30, 2015. Please refer to the supplementary slides posted on our Investor Relations website for revised historical financial information.
Conference Call Information
Amkor will conduct a conference call on Monday, August 1, 2016, at 5:00 p.m. Eastern Time. This call may include material information not included in this press release. This call is being webcast and can be accessed at Amkor's website: www.amkor.com. You may also access the call by dialing 1-877-645-6380 or 1-404-991-3911. A replay of the call will be made available at Amkor's website or by dialing 1-855-859-2056 or 1-404-537-3406 (conference ID 50569304). The webcast is also being distributed over NASDAQ OMX's investor distribution network to both institutional and individual investors. Institutional investors can access the call via NASDAQ OMX's password-protected event management site, Street Events ( www.streetevents.com).
About Amkor Technology, Inc.
Amkor Technology, Inc. is one of the world’s largest providers of outsourced semiconductor packaging and test services. Founded in 1968, Amkor pioneered the outsourcing of IC packaging and test, and is now a strategic manufacturing partner for more than 250 of the world’s leading semiconductor companies, foundries and electronics OEMs. Amkor’s operating base includes more than 8 million square feet of floor space, with production facilities, product development centers, and sales and support offices located in key electronics manufacturing regions in Asia, Europe and the U.S. For more information, visit www.amkor.com.
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AMKOR TECHNOLOGY, INC. |
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Selected Operating Data |
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| Q2 2016 | Q1 2016 | Q2 2015* | ||||||||||||
| Net Sales Data: | ||||||||||||||
| Net sales (in millions): | ||||||||||||||
| Advanced products** | $ | 394 | $ | 356 | $ | 362 | ||||||||
| Mainstream products*** | 523 | 513 | 375 | |||||||||||
| Total net sales | $ | 917 | $ | 869 | $ | 737 | ||||||||
| Packaging services | 83 | % | 82 | % | 85 | % | ||||||||
| Test services | 17 | % | 18 | % | 15 | % | ||||||||
| Net sales from top ten customers | 67 | % | 67 | % | 62 | % | ||||||||
| End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers) : | ||||||||||||||
| Communications (smart phones, tablets, handheld devices, wireless LAN) | 44 | % | 42 | % | 56 | % | ||||||||
| Automotive and industrial (infotainment, safety, performance, comfort) | 25 | % | 25 | % | 12 | % | ||||||||
| Consumer (televisions, set top boxes, gaming, portable media, digital cameras) | 14 | % | 16 | % | 12 | % | ||||||||
| Networking (servers, routers, switches) | 11 | % | 10 | % | 11 | % | ||||||||
| Computing (PCs, hard disk drives, printers, peripherals, servers) | 6 | % | 7 | % | 9 | % | ||||||||
| Total | 100 | % | 100 | % | 100 | % | ||||||||
| Gross Margin Data: | ||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Cost of sales: | ||||||||||||||
| Materials | 37.7 | % | 37.5 | % | 37.2 | % | ||||||||
| Labor | 16.0 | % | 16.2 | % | 15.7 | % | ||||||||
| Other manufacturing | 32.0 | % | 32.2 | % | 31.5 | % | ||||||||
| Gross margin | 14.3 | % | 14.1 | % | 15.6 | % | ||||||||
