ASE Group Realized NT $1.79 EPS for First Three Quarters in 2016, Projected Decline in 4Q16

31 Oct

Taiwanese independent semiconductor assembling and test manufacturer ASE Group announced its Q316 earnings on October 27. According to the financial results, the company’s consolidated revenue income rose to NT $72.7 billion (US $2.29 billion), which represents an increase of 11% compared to the previous quarter, and growth of 13% year on year (YoY). The gross margin almost remained unchanged at 19.4%, which is very similar to that of 19.6% in 2Q16 but slightly higher than 3Q15’s 17.8%.

The company reported 27% growth in net income at NT $5.5 billion compared to 2Q16 though it showed 14% YoY decline. The diluted earnings per share reached NT $0.64. Meanwhile, the net income of the first three quarters in 2016 rose to NT $13.7 billion while earnings per share reached NT $1.79.

ASE CFO Dong Hongsi hosted 3Q16 earnings on October 27. Based on the IC testing business perspective, ASE realized NT $43 billion in consolidated revenue income, which represents growth of 12% compared to 2Q16, and an increase of 7% YoY. The gross margin rose from 2Q16’s 24.8% to that of 3Q16’s 25.5%, though still lower than that of 3Q15’s 26.7%. Operating Profit Margin rose from 2Q16’s 12.9% to 14.4%, which is slightly higher than 3Q15’s 14.2%.

When analyzing product categories of 3Q16, communication products accounts for 53% of the revenue income, which is followed by automotive electronics, consumer’s electronic products and other products at 35% while computer products account for 12%. Meanwhile, revenue income of communication products accounts for 51% of the company’s EMS service, which is followed by consumer electronic products at 20%, computer products at 16%, other industrial products at 7% and automotive electronics at 5%.

When discussing about the 4Q16 outlook, Dong said that the company is projected to witness a decline in revenue income due to seasonal adjustment. Meanwhile, the gross margin is expected to remain unchanged compared to 3Q16. As for EMS business, demand of major clients contributed to income growth at 10-15%. The gross margin is estimated to remain the same when compared to 2H16. Overall, based on ASE’s production utilization rate, it’s projected that ASE’s packaging will reach 80% while testing business it to drop to 77-79%.