Aug. 04--Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM), (which trades as TowerJazz) reported its second quarter results today. The company had revenue of $234 million in the quarter, 76% more than in the previous quarter and 87% more than in the corresponding quarter of 2013. The sharp rise in revenue is mainly thanks to consolidation of results of the joint venture with Panasonic, Tower Panasonic Semiconductor Co. (TPSCo).
On a non-GAAP basis, Tower made a net profit of $31 million ($0.62 per share) in the second quarter, representing an increase of 70% compared with the $18 million profit ($0.47 per share) in the second quarter of 2013, and 59% compared with the $19 million profit ($0.40 per share) in the first quarter of 2014.
Both profit and revenue handily beat the consensus analysts' estimate of earnings per share of $0.42 on revenue of $229 million.
On a GAAP basis, Tower made a net loss in the second quarter of 2014 of $16 million ($0.31 per share), compared with a net loss of $23 million ($0.59 per share) in the second quarter of 2013. The company said that the GAAP net loss for the second quarter of 2014 included $4 million of non-cash cost resulting from the Nishiwaki Fab cessation of operations in Japan, which was announced in the first quarter of 2014, and a gain from acquisition derived from the high value assigned to Tower's stake in TPSCo of $15 million, net.
At the end of the second quarter, Tower had cash and short-term deposits of 192 million, compared with $123 million at the end of 2013.
In its guidance, Tower says it expects third quarter revenue of $225 million with an upward or downward range of 5%. The company explains that the third quarter of 2014 will be the first quarter to realize no revenue from Micron, so that the mid-range guidance represents year-over-year revenue growth of 20% for all customers (excluding Micron and Panasonic) and 13% quarter over quarter growth.
The company also says that during the quarter it received offers and opportunities to strengthen its balance sheet by exchanging its existing debt with longer term, non-equity debt vehicles, and that it is now evaluating them.
Tower CEO Russell Ellwanger said, "The second quarter was our first integrating TPSCo activities and consolidating the revenues. There were no operational surprises against our plans and better than expected business activities. We closed negotiations with third party customers, including high end CIS and top-tier IDM transfers, which should reach annual revenues of well beyond $100 million within the next 3 years. We expect these first contracts and agreements to begin volume production ramp in the second half of 2015.
"We are seeing strong market demand from customers being served by all of our business units, which we are well poised to serve both organically and with the newly added operational and technical capabilities of TPSCo, enabling us to exceed our $1 billion annual revenue target."
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