Amkor Crushed on Outlook

Contract chip assembler Amkor Technology ( AMKR) was flattened Thursday after saying limited sales of high-margin products would depress earnings in its second quarter.

The company expects to earn just 6 cents a share in the three months ended June 30, compared with previous guidance for as much as 22 cents a share. Sales guidance stayed roughly the same: up 6% sequentially compared with a previous range of up 5% to 8%.

The problem is profitability, with gross margin now expected to be 19% instead of the 24% Amkor previously forecast.

"Our revenue from several high-margin advanced packages ... was less than we expected, reflecting weaker-than-normal support of customer forecasts in the wireless sector and some shortages of high-end wafers from the foundries," Amkor said. Higher factory and materials costs also hurt the quarter.

Amkor was recently down $2.24, or 27.4%, to $5.94.

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