Tower Semiconductor Embarks on Business Overhaul After Q4 Performance, Stock Gains

Tower Semiconductor Ltd TSEM reported a fourth-quarter FY23 revenue decline of 12.8% year-on-year to $351.71 million, beating the consensus of $350.00 million.

The high-value analog semiconductor solutions foundry's adjusted EPS of $0.55 beat the consensus of $0.52.

Gross profit was $84.42 million, down by 32.3% Y/Y. Operating profit of $45.17 million declined from $98.73 million a year ago.

It generated $126 million in operating cash flow and held $1.24 billion in cash and equivalents.

The company is optimizing its operations by strategically consolidating its 6" Fab 1 activities into its 8" Fab 2 operations. Parallel to this, it proposed to phase out certain lower-margin products.

CEO Russell Ellwanger stated: "We are seeing a rebound in several market segments, driving sequential revenue growth throughout the year."

Outlook: Tower Semiconductor expects first-quarter revenue of $325 million, with an upward or downward range of 5% versus the $325.12 million consensus.

Is Tower Semiconductor A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action, which you can find on Benzinga's quote pages – like Tower Semiconductor's page, for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Tower Semiconductor does not pay a dividend, but obviously, there are a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 15.85%, you'll need to buy a share of ARMOUR Residential REIT by the 14th March, 2024. Once done, you can expect to receive a nominal payout of $0.24 on 28th March, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Tower Semiconductor will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

TSEM Price Action: Tower Semiconductor shares traded higher by 4.05% at $29.79 premarket on the last check Wednesday. 

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