ChipMOS (IMOS) Posts Q1 EPS of $0.10

ChipMOS (NASDAQ: IMOS) reported Q1 EPS of $0.10, which may note compare with than the analyst estimate of $0.21. Revenue for the quarter came in at $146.8 million versus the consensus estimate of $143.2 million.

S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS, said, "First quarter revenue and gross margin were in-line with expectations in a traditionally seasonally weak quarter. We expect this to represent a trough point for 2016 quarterly revenue and our overall capacity utilization level. Given our positive outlook and view that our shares remain undervalued, our Board of Directors authorized a new repurchase program for 15 million shares of ChipMOS Taiwan from the open market in Taiwan during the period of May 13 to July 12, 2016. From a business standpoint, we expect to benefit starting in Q2 from a channel inventory rebuild related to the broader 4K2K TV market, and new product cycles in smartphones later in the year. We continued to gain momentum in Q1 in our LCD driver business, led by strength for large panels. Demand was seasonally softer from customers in our small panel LCD driver business. In memory, we also saw a mixed performance, with commodity DRAM demand higher and Flash related revenue slightly lower. We continue to gain traction in growth areas, with revenue in our mixed-signal business up 20.6% compared to 4Q15, and our WLCSP revenue up 71.9% compared to 4Q15. Overall, we are very optimistic about our prospects moving forward based on customer demand requirements, growth initiatives and expected improvements in the macro market. Our planned China expansion remains central to our longer-term success. Of note, we continue to work through the regulatory approval process related Tsinghua Unigroup's proposed investment in ChipMOS Taiwan. While we are optimistic we will have a favorable outcome, we do not control the regulatory approval process or ultimate outcome. Importantly, our strong balance sheet will enable us to move forward in the near-term, if we need to, by self-financing our planned China expansion in the event of any delay on Tsinghua Unigroup's investment. In line with this, our Board of Directors authorized ChipMOS Taiwan to enter a NT$13.2 billion (approximately US$410.2 million) syndication loan agreement in order to refinance our existing credit facilities on more favorable terms and to provide additional working capital for general corporate purposes. We expect to sign the new agreement with a syndicate of 10 Taiwan banks on May 16, 2016. Finally, we continue to make progress in the proposed merger of ChipMOS Taiwan and ChipMOS Bermuda. We filed our prospectus on February 26 with the U.S. Securities and Exchange Commission and filed an amendment to our prospectus on April 18. We are hopeful that we can hold shareholder votes in 3Q16, with a targeted closure on track for later in 3Q16."

Second Quarter 2016 Outlook

The Company expects revenue for the second quarter of 2016 will increase in the low single digits as compared to the first quarter of 2016. The Company expects gross margin on a consolidated basis to be in the range of approximately 17% to 21% for the second quarter of 2016. The Company expects depreciation and amortization expenses for the second quarter of 2016 to be approximately US$26 million. Operating expenses are expected to be approximately 8% to 11% of revenues in the second quarter of 2016. The Company expects CapEx spending to be approximately US$36 million in the second quarter of 2016. The total number of the Company's outstanding common shares at the end of the second quarter of 2016 is expected to be approximately 27 million.

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

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