Amkor Technology Inc (NASDAQ:AMKR) Q3 2020 Earnings Conference Call - Final Transcript

Oct 26, 2020 • 05:00 pm ET


Amkor Technology Inc (NASDAQ:AMKR) Q3 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Amkor Technology Third Quarter 2020 Earnings Conference Call. My name is Diego, and I will be your conference facilitator today. At this time, all participants are in a listen-only mode. After the speakers' remarks, we will conduct a question-and-answer session. As a reminder, this conference is being recorded.

I would now like to turn the conference call over to Vince Keenan. Mr. Keenan, please go ahead.

Vincent Keenan

Good afternoon, everyone, and thank you for joining us for Amkor's third quarter 2020 earnings conference call. Joining me today are Giel Rutten, our Chief Executive Officer; and Megan Faust, our Chief Financial Officer.

Our earnings press release was filed with the SEC this afternoon and is available on our website. During this conference call, we will use non-GAAP financial measures, and you could find a reconciliation to the U.S. GAAP equivalent on our website. We will also make forward-looking statements about our expectations for Amkor's future performance, based on the environment as we currently see it.

Of course, actual results could be different. Please refer to our press release and other SEC filings for information on risk factors, uncertainties and exceptions that could cause actual results to differ materially from these expectations. Please note that the financial results discussed today are preliminary and final data will be included in our Form 10-Q.

And now I would like to turn the call over to Giel.

Giel Rutten

Good afternoon, everyone, and thanks for joining the call today. Before reviewing our financial results for the third quarter, I would like to announce an important milestone for Amkor. The Board has decided to initiate a regular quarterly cash dividend of $0.04 per share, with the first payment to be made in January, 2021. This decision reflects confidence in our consistent financial performance, good free cash flow generation and a positive long-term business outlook. Megan will provide additional information regarding the dividend later in our call.

Now let me turn to a review of our third quarter performance and the outlook for the fourth quarter. I will also cover the important markets and technologies, where I believe Amkor is well positioned for growth. Continued solid demand in our advanced packaging technologies resulted in the highest quarterly revenue in Amkor's history. Revenue of $1.35 billion was above the high end of guidance, an increase of 25% year-over-year and 15% sequentially. Broad-based demand in the communications and automotive and industrial markets drove both revenue and profitability higher than expectations. When combined with the strong first-half results, we generated $0.87 of EPS in just the first three quarters. This enabled us to further strengthen our balance sheet.

Communications revenue was very robust in the third quarter, mainly driven by the launch of next-generation premium smartphones. Revenue increased over 30% sequentially and year-on-year. The strength is a reflection of Amkor's solid position in the mobile market, with engagements across a wide range of customers leveraging our advanced technology portfolio. Although overall smartphone units are forecasted