Why Amkor Technology (AMKR) Is Gaining Today

NEW YORK (TheStreet) -- Amkor Technology (AMKR) was gaining 4.2% to $7.37 in after-hours trading Monday after beating analysts' estimates for earnings and revenue in the first quarter.

For the first quarter Amkor reported earnings for 9 cents a share, beating analysts' estimates of 2 cents a share by 7 cents. Revenue for the chipmaker grew 1.2% from the year-ago quarter to $696 million. Analysts surveyed by Thomson Reuters expected revenue of $678.13 million for the quarter.

"First quarter results were stronger than we anticipated, driven by incremental demand for advanced packages," Amkor president and CEO Steve Kelley said in a statement. "We made solid progress in winning key mobile device opportunities, expanding our customer base and driving improved profitability."

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TheStreet Ratings team rates AMKOR TECHNOLOGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMKOR TECHNOLOGY INC (AMKR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AMKR's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 260.00% and other important driving factors, this stock has surged by 97.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Currently the debt-to-equity ratio of 1.73 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, AMKR's quick ratio is somewhat strong at 1.45, demonstrating the ability to handle short-term liquidity needs.
  • The gross profit margin for AMKOR TECHNOLOGY INC is currently lower than what is desirable, coming in at 33.51%. Regardless of AMKR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AMKR's net profit margin of 5.40% is significantly lower than the industry average.
  • You can view the full analysis from the report here: AMKR Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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