Himax Q3 Earnings: Revenue Beats Forecast, CEO Highlights Growth in Automotive, AI, OLED Sectors, Sets Cautious Q4 Guidance

Himax Technologies, Inc HIMX reported a fiscal third-quarter revenue decline of 6.8% year-on-year to $222.41 million, beating the analyst consensus estimate of $204.87 million. Net revenues decreased 7.2% Q/Q.

Earnings per ADS was $0.07, beating the analyst consensus estimate of $0.03. The stock price climbed after the print.

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The gross margin reached 30.1%, which is in line with its guidance.

Revenue from large display drivers was $30.7 million, a decrease of 21.2% Q/Q due to weaker monitor and TV IC sales due to customers’ de-stocking amid challenging market conditions following substantial second-quarter replenishment for shopping festivals.

Small and medium-sized display driver revenue was $155.4 million, a decrease of 2.2% Q/Q, helped by stronger-than-expected sales in the automotive and tablet markets.

Revenue for non-driver business was $36.3 million, up 13.1% Q/Q, attributable to a double-digit sequential decline in Tcon sales, particularly for monitor application, as customers pulled forward their inventory purchases in the prior quarter.

Operating expenses for the quarter decreased 4.7% Y/Y to $60.8 million.

Operating income was $5.9 million compared to $11.1 million a year ago, and the margin declined by 200 bps to 2.6%, primarily due to lower sales and gross margins.

As of September 30, 2024, the company’s inventories were $192.5 million, markedly lower than the $203.7 million they had in the previous quarter.

Himax held $206.5 million of cash, cash equivalents, and other financial assets as of September 30, 2024. HIMX used $(3.14) million in operating cash flow, compared to a positive operating cash flow of $16.04 million a year ago.

Himax CEO Jordan Wu anticipates a challenging macro environment in the fourth quarter, focusing on managing expenses and enhancing efficiency. Wu expressed confidence in crucial growth areas like automotive, AI, WLO, and OLED, expecting these sectors to drive substantial business growth.

Regarding WLO, Wu highlighted progress in collaboration with FOCI on LPO/CPO production, noting early advancements in small-scale manufacturing. Additionally, Himax, FOCI, and top AI semiconductor and foundry partners are developing next-generation technology, which Wu believes will open new revenue streams and significantly boost future revenue and profit.

Q4 Guidance: Himax expects net revenues to grow flat to slightly down sequentially vs. the estimate of $202.59 million and EPADS of $0.093– $0.110 versus the $0.110 estimate.

Price Action: HIMX stock is up 3.36% at $6.15 premarket at the last check Thursday.

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