Will Amkor (AMKR) Q4 Earnings Gain From End-Market Demand?

Amkor Technology, Inc. (NASDAQ:AMKR) will report fourth-quarter 2017 results on Feb 12. Last quarter, the company’s earnings surprise was 21.1%.

We observe that shares of Amkor Technology have lost 3.2% in the past 12-months, significantly underperforming its industry’s rally of 11.2%.

Let us see how things are shaping up for this announcement.

Factors to Consider

Amkor has been seeing solid growth across all end markets, predominantly communications and automotive. Demand from all markets is expected to remain stable and so are revenues in the to-be-reported quarter.

The company acquired OSATS (Outsourced Semiconductor Assembly and Test Services) company, NANIUM last year and its integration has been quite smooth so far. Amkor has expanded production in Portugal and started installing NANIUM process in K5 facility in Korea.

The acquisition will help Amkor strengthen its foothold in the fast-growing market of wafer-level packaging for smartphones, tablets and other applications. NANIUM is likely to have contributed to fourth-quarter earnings.

Amkor continues to make efforts to channelize its resources in important growth areas like automotive. The company has also increased investments in Greater China. These are expected to contribute significantly to the company’s top-line growth.

For the fourth quarter, Amkor expects revenues in the range of $1.05-$1.13 billion. Gross margin is expected within 17-18.5%. Earnings per share are expected in the range of 14 cents-23 cents on a GAAP basis.

What Our Model Says

Amkor has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult. This is because per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

We don’t recommend Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement.

Stocks to Consider

Here are a few stocks that you may want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise.

Applied Materials, Inc. (NASDAQ:AMAT) , with an Earnings ESP of +0.57% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA Corporation (NASDAQ:NVDA) , with an Earnings ESP of +4.13% and a Zacks Rank #2.

Advanced Micro Devices, Inc. (NASDAQ:AMD) , with an Earnings ESP of +8.72% and a Zacks Rank #3.

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