AMS Shares Jump 7% After Chipmaker Predicts Growth in Third Quarter

Austria Microsystems' growth is backed by consumer and communications products, the company says.
By Mariko Iwasaki ,

Austria Microsystems, or AMS (AMSSY) , saw its shares jump 7% after the designer and maker of semiconductors supplying to companies such as Apple (AAPL) - Get Report  said it expects revenue and operating profit margin to improve in the third quarter, partly thanks to "positive momentum" in the consumer business. (Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.)

AMS makes analog semiconductors used in sensors for consumer electronic products as well as automotive, industrial and medical products.

The Premstatten, Austria-based company, which announced second-quarter results after the market closed yesterday, said it expects third-quarter revenue to come in between €146 million ($161 million) and €153 million, advancing from €132.4 million booked in the second quarter. The company booked €153 million in the third quarter of 2015.

Positive momentum in the consumer business will likely offset uncertainty in demand and microeconomic conditions in other markets, the company said. AMS assumes an exchange rate of $1.10 to the euro. 

AMS also forecasts adjusted operating margin of around 18% to 20% in the third quarter, compared with 18.4% in the second quarter. It did not specify the reasons for the margin improvement.

In the second quarter, revenue fell 22% year-on-year, from €169.5 million to €132.4 million, while net income plunged from €41.8 million to €19.6 million, resulting in diluted earnings per share dropping from €0.58 to €0.28.

The consumer and communications business, which provides products for smartphones and tablets, showed a solid performance "despite a challenging situation in the consumer market which continued in the second quarter," driven by high performance for light sensor solutions, AMS said. Meanwhile, performances in the industrial, medical, and automotive businesses were in line with expectations, the company said.

Today, AMS said it acquired Germany's MAZeT GmbH, a color and spectral sensing systems specialist, for an undisclosed value, to boost its strength in optical sensors. In the second quarter, AMS acquired U.K.'s Cambridge CMOS Sensors, which provides gas sensor solutions.

Apple is expected to report quarterly earnings results today. 

AMS shares recently traded up 6.92% at Sfr29.35 ($29.71), making the market cap Sfr2.15 billion.

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