NEW YORK (TheStreet) -- Himax Technologies (HIMX - Get Report) was falling -8.4% to $7.05 Friday after missing analysts' estimates for earnings in the first quarter and guiding below estimates for the second quarter.
For the first quarter Himax reported earnings of 9 cents a share, missing the Capital IQ Consensus Estimate of 10 cents a share by 1 cent. Revenue grew 10.7% from the year-ago quarter to $194.6 million. Analysts expected revenue of $194.2 million for the quarter.
Looking forward to the second quarter Himax expects revenue of $194.6 million, below analysts' estimates of $223.2 million in revenue. The company expects earnings of 13.2 cents to 15.2 cents for the second quarter due to a 5 cent gain from selling a stake in a U.S. display company. Analysts expect earnings of 13 cents a share in the quarter.
TheStreet Ratings team rates HIMAX TECHNOLOGIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HIMAX TECHNOLOGIES INC (HIMX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HIMAX TECHNOLOGIES INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HIMAX TECHNOLOGIES INC increased its bottom line by earning $0.35 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.35).
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HIMX's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.44, which illustrates the ability to avoid short-term cash problems.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 59.04% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: HIMX Ratings Report