Tower Semiconductor Ltd. Looks Forward to Stable GAAP Profits in 2014
Image source: TowerJazz.
Tower Semiconductor , the Israeli chip foundry also known as TowerJazz, reported fourth-quarter results today.
Sales decreased 9% year over year due to a contractual volume decrease in the important Micron Technology partnership, effective three quarters ago. However, the $135 million tally was a 2% sequential increase from third-quarter results and in line with analyst projections.
Adjusted earnings shrank 24% year over year, landing at $0.34 per share. Here, analysts would have settled for $0.29 per share.
Management underscored that organic revenues increased 25% year over year if you set the Micron adjustment aside. Moreover, a new partnership with Panasonic should more than make up for the lost Micron revenue, starting in the second quarter of 2014.
As a reminder, the Panasonic joint venture is expected to add roughly $400 million to TowerJazz's annual revenues, and comes with a five-year commitment. Total revenues for the 2013 fiscal year stopped at $505 million.
CEO Russell Ellwanges sees TowerJazz generating reliable profits in 2014, thanks to organic growth and the big-ticket Panasonic agreement. "We expect to break $900 million revenue annual run rate starting the second quarter and to continue and surpass the $1 billion revenue run rate with sustainable GAAP net profit," he said. In 2013, TowerJazz reported a GAAP net loss of $2.72 per share.
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Anders Bylund owns shares of Micron Technology. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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