ChipMOS (IMOS) Tops Q1 EPS by 1c

ChipMOS (NASDAQ: IMOS) reported Q1 EPS of $0.42, $0.01 better than the analyst estimate of $0.41. Revenue for the quarter came in at $167 million versus the consensus estimate of $165.15 million.

Second Quarter 2015 Outlook

The Company expects second quarter of 2015 revenue to be flat to down in the low single digits as compared to the first quarter of 2015. The Company expects gross margin on a consolidated basis to be in the range of approximately 20% to 24% for the second quarter of 2015. The Company anticipates depreciation and amortization expenses for the second quarter of 2015 to be approximately US$24 million. Operating expenses are expected to be approximately 6% to 8% of revenues in the second quarter of 2015. The Company expects CapEx spending to be approximately US$28 million in the second quarter of 2015, with CapEx spending for the full year 2015 to be less than US$125 million. The total number of the Company's outstanding common shares at the end of the second quarter of 2015 is expected to be approximately 29 million.

S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS, said, "The first quarter developed as expected and was in-line with our prior guidance. This is normally a seasonal lower quarter for the industry, with the volumes typically ramping as we move into the second half of the year. Demand strength continued for large panels in our LCD driver business, which was offset by seasonally softer demand in our small panel LCD drivers and in memory products. In memory, revenue in our DRAM business, led by softness in commodity DRAM demand, decreased 12.6% in the first quarter compared to the prior quarter. Our flash business, including Mask ROM, declined approximately 27.0% over prior quarter. Revenues from mixed-signal and gold bumping remained flat. One bright spot was our WLSCP revenue, which grew 10.9% in the first quarter compared to the fourth quarter. Reflecting the seasonally lower demand level, our overall capacity utilization rate declined to 72% in the first quarter compared to 81% in the prior fourth quarter and 77% in the same period last year. Based on our outlook, we expect weakness from the first quarter to carry over to the second quarter. We will continue to act conservatively with regards to our inventory management, CapEx spending and our operating expenses. This is evidenced by our commitment and success at lowering our debt levels and fortifying our cash position and balance sheet. We remain optimistic about our business focus and growth strategy, our CapEx plan and our continued corporate streamlining initiatives."

S.K. Chen, Chief Financial Officer of ChipMOS, said, "The positive operating leverage in our business is seen by our gross margin which held at 23.3% on the lower quarterly revenue. We ended the first quarter with US$518.4 million in cash and cash equivalents, after generating US$66.2 million in cash from operations. As a result, we improved our net debt to equity ratio to -52.3% as of March 31, 2015 compared to -50.8% at the end of 2014, with a net cash balance of US$244.8 million as of March 31, 2015. This is after we reduced our net debt by another US$7.1 million during the first quarter and after US$32.3 million of CapEx in the quarter. On April 22, 2015, all of the necessary regulatory approvals for ThaiLin merger were rendered with no further comments. The effective date of ThaiLin merger is expected to be on June 17, 2015. This gives us added confidence as we move through the year, and pursue both corporate growth opportunities and catalysts around our restructuring efforts that can build further shareholder value."

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