Tower 1Q18 financial results disappoint

May 16, 2018 //By Peter Clarke
Tower 1Q18 financial results disappoint
The value of shares in specialty foundry Tower Semiconductor Ltd. (Migdal Haemek, Israel), which trades as TowerJazz, fell 9 percent on the announcement of its financial results for 1Q18.

The company reported sales of $313 million in the 1Q18, down 5 percent on sales of $330 million the same quarter a year before. It made a net profit of $26 million compared with a net profit of $46 million made a year earlier.

Nonetheless the company has record net cash position at the end of the quarter of $247 million.

The company said it expects revenues of $335 million plus or minus 5 percent for the 2Q18. Tower achieved revenues of $345 million in 2Q17 and so seems set to be down for a second quarter running. However, CEO Russell Ellwanger looked forward to 25 percent growth in revenues by 4Q18, which would be considerably ahead of 4Q17.

"The quarter, as forecasted, was impacted by seasonality and some activities, moving our offering to higher value richer mixes. Present customer forecasts show continued quarter over quarter growth throughout 2018, with a fourth quarter demonstrating over 25 percent organic business unit growth against the first quarter, and with commensurate bottom line achievements."

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