Yahoo Finance ASE Technology (ASX) to Report Q1 Earnings: What's in Store?
ASE Technology Holding Co., Ltd. ASX is set to report first-quarter 2020 results on Apr 29.
For the first quarter, the company expects ATM segment revenues to be between second- and third-quarter 2019 reported figures of NT$59.6 billion and NT$67.9 billion, respectively. While EMS segment revenues are expected to be unchanged from the prior-year quarter’s figure of NT$35 billion.
Notably, the company has announced unaudited consolidated revenues of NT$37.9 billion ($1.3 billion) for March, NT$28.1 billion ($939 million) for February and NT$31.3 billion ($1.04 billion) for January.
Q4 at a Glance
In fourth-quarter 2019, the company reported revenues of NT$116 billion, up 1.7% from the year-ago quarter’s reported figure but down 1.3% sequentially.
Diluted earnings during the quarter were NT$1.47 ($0.096 per ADS) per share, up 18.5% from the year-ago quarter’s reported quarter and 10.5% sequentially.
Let’s see how things have shaped up prior to this announcement.
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Factors to Consider
Robust adoption of the company’s test solutions is expected to have driven the company’s ATM segment revenues in the quarter under review.
Moreover, solid traction for system-in-package (SiP) products is likely to have boosted EMS revenue growth in the to-be-reported quarter.
In 2019, the company generated EMS revenues of $165.9 billion, up 9% year over year, driven by growth within SiP products. The momentum is likely to have continued in the quarter to be reported owing to the growing popularity of 5G-related devices.
Further, due to a decline in input-output density for shrinking, there is an ongoing momentum in fan-out packaging methods on the next foundry node. This is expected to get reflected in first-quarter results.
Additionally, the company’s investments in geographical expansion are likely to have aided it in acquiring new customers. This is anticipated to have driven top-line growth in the to-be-reported quarter.
However, increased expenditure on Research & Development (R&D) and employee compensation are likely to have kept margins under pressure.
Moreover, the global coronavirus pandemic has led to a shortage of labor for the company. This has caused delays in production, which is expected to have had a negative impact on revenues. Supply-chain disruptions due to the crisis are also likely to have been a headwind in the first quarter.
Zacks Rank & Other Stocks to Consider
ASE Technology currently sports a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are Avid Technology, Inc. AVID, Netlist, Inc. NLST and OSI Systems, Inc. OSIS, which sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Avid, Netlist and OSI is currently pegged at 20%, 15% and 18%, respectively.
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