Migdal Ha'emek-based Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM),which trades as TowerJazz, reported a decline in fourth quarter revenue today to $306 million in the fourth quarter of 2019 from $334 million in the fourth quarter of 2018. The company also provided disappointing guidance, saying that it expects revenue for the first quarter of 2020 to be $300 million, with an upward or downward range of 5%. Tower's share price is currently down 8.7% on the Tel Aviv Stock Exchange.
Gross and operating profits for the fourth quarter of 2019 were $55 million and $19 million, respectively, which compares with $58 million and $23 million, respectively, in the prior quarter, and $76 million and $40 million, respectively, in the fourth quarter of 2018
EBITDA for the fourth quarter of 2019 was $75 million, which compares with $75 million in the prior quarter and $93 million in the fourth quarter of 2018
Net profit for the fourth quarter of 2019 was $21 million, or $0.19 per share, which compares with $22 million or $0.21 per share in the prior quarter. Net profit for the fourth quarter of 2018 was $38 million, or $0.36 per share.
Both revenue and earnings per share fall short of the analysts' consensus estimate.
For 2019 as a whole, revenue was $1.23 billion, down from $1.30 billion in 2018, which the company says mainly reflects a $111 million non-organic revenue reduction (mainly as a result of the March 2019 announced Panasonic renewed contract), offset by $41 million, or 5%, year over year organic revenue growth.
EBITDA for 2019 was $299 million, down from $362 million in 2018; Net profit for 2019 was $90 million, or $0.84 per share, down from $136 million, or $1.32 per share, in 2018. The company says that the decline is mainly due to the reduction in non-organic revenue components.
Cash flow generated from operations in 2019 was $291 million.
Tower Semiconductor CEO Russell Ellwanger said, "Our strong, long-term customer partnerships with a focus on growing analog market applications, enabled us to achieve organic growth in 2019. Our customer forecast and present orders indicate good overall growth ramping sequentially throughout 2020, resulting in a significant second half 2020 performance as compared to the second half 2019.
"We expect 2020 to achieve year-over-year growth with low double-digit organic growth, achieved through higher utilization levels in our factories including the ramp of our newer 200mm technology platforms and offerings, an increase in 300mm customer demand supported by capacity increase organically for short to mid-term, and in addition, capacity growth through M&As for long-term demand. We are well-positioned to participate in and benefit from expected markets recovery and present upward business trends."
Published by Globes, Israel business news - en.globes.co.il - on February 18, 2020
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