Why Tower Semiconductors Is One of Monday’s Biggest Earnings Losers
Tower Semiconductor released disappointing third-quarter financial results before the markets opened on Monday.
When Tower Semiconductor Ltd. (NASDAQ: TSEM) released its third-quarter financial results before the markets opened on Monday, the company said that it had $0.33 in earnings per share (EPS) and $322.6 million in revenue. Consensus estimates had called for $0.40 in EPS and revenue of $335.04 million, and the same period of last year reportedly had EPS of $0.54 on $354.56 million in revenue.
Looking ahead to the fourth quarter, the company expects to see revenues of approximately $340 million, with a range of 5% up or down. Consensus estimates call for $0.53 in EPS and $364.51 million in revenue for the coming quarter.
During the latest quarter, the company noted cash from operations of $69 million with free cash flow of $29 million. Also, cash generation from operations year-to-date was $221 million, with $315 million net cash balance as of the end of the quarter.
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CEO Russell Ellwanger commented:
We entered the year having decided to focus on profitability, rather than utilizing valuable capacity for lower margin businesses. This has had a greater than expected revenue impact in 2018 while building the higher value mix and with some high-end replacements not having met customer forecasts. The present overall market softness has had a recent notable impact across our business units, with a fourth quarter revenue roll-up lower than previous expectations. However, we expect to see fourth quarter margins increase as a result of this much richer products mix.
Shares of Tower Semiconductors were last seen down about 16% at $14.95 Monday morning, with a consensus analyst price target of $29.75 and a 52-week trading range of $14.77 to $36.69.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
