Tower Semiconductor Ltd (NASDAQ:TSEM) reported a fiscal first-quarter 2024 revenue decline of 8% year-on-year to $327.24 million, beating the analyst consensus estimate of $324.52 million.
The Israel-based contract chipmaker's adjusted EPS of $0.46 beat the analyst consensus estimate of $0.39.
Gross profit was $72.61 million, down by 24.1% Y/Y. The margin declined 473 bps to 22.2%. Operating profit of $33.99 million declined 62% Y/Y.
It generated $110 million in operating cash flow and held $1.24 billion in cash and equivalents as of March 31, 2024.
Russell Ellwanger, the CEO of Tower, acknowledged the overall market downturn, specifically highlighting significant drops in demand for power management and automotive chips to Reuters.
He expressed optimism for recovery beyond the first quarter in several sectors, despite the current slowdown in automobile sales and reduced chip purchases by data centers due to overstocking.
Ellwanger also emphasized the need to increase production capacity amidst global uncertainties that dampen consumer purchasing behavior.
He confirmed that the ongoing conflict between Israel and Palestinian Hamas militants has not materially impacted Tower's operations.
Ellwanger predicts more than 7% sequential growth for the second quarter and significant growth in the latter half of the year.
Outlook: Tower Semiconductor expects second-quarter revenue of $350 million, with an upward or downward range of 5% versus the $334.84 million consensus.
During fiscal fourth-quarter results, the company disclosed consolidating its 6′′ Fab 1 activities into its 8′′ Fab 2 operations and phasing out certain lower-margin products.
TSEM Price Action: Tower Semiconductor shares traded higher by 6.26% at $36.40 at the last check Thursday.
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