Amkor Drops 6% in After Hours Trading Despite Beating EPS Target (AMKR)

Amkor Technology AMKR, a leading provider of semiconductor assembly and test services, today announced financial results for the first quarter, with net revenues of $665 million, net income of $25 million, and earnings per diluted share of $0.10.

“First quarter results were consistent with our expectations even though sales were reduced by approximately $6 million due to the impact of the Japan earthquake on our Kitakami operations,” said Ken Joyce, Amkor's president and chief executive officer. “Gross margin of 19% was at the top of our expected range. We saw typical seasonal softness during the quarter, and our strong position in gaming amplified these seasonal patterns. We also saw weakness in networking and certain consumer electronics due to inventory adjustments by some of our customers.”

Based upon the currently available information, Amkor has the following expectations for the second quarter 2011:

• Net sales of $650 million to $700 million, down 2% to up 5% from the prior quarter
• Gross margin between 16% and 20%
• Net income of $8 million to $37 million, or $0.04 to $0.15 per diluted share
• Capital additions of around $125 million for the second quarter, and capital additions of around $450 million for the full year

“We delivered a solid gross margin of 19% despite the challenging demand environment, continued pressure from unfavorable foreign currency exchange rate movements, higher gold prices and the events in Japan,” said Joanne Solomon, Amkor’s executive vice president and chief financial officer. “We kept a tight focus on labor and other manufacturing costs during this seasonally slower time of the year.”