As a 3D-sensor supplier and partner to Qualcomm (NASDAQ: QCOM), Himax Technologies’ (NASDAQ: HIMX) fourth-quarter results should not disappoint many. The company reported earnings that met estimates but revenue declines that missed on analyst consensus. Ahead of the results, HIMX stock fell. It fell again after the report.
Himax earned $0.14 a share as revenue fell 11% Y/Y to $181.08 million. The lower sales is due to legacy businesses declining. Management is well-aware of where the business is headed, so the CEO focused on the production timeline for 3D sensors ahead. TDDI and LCOS are a non-event until next year, 2019 while demand for WLO and higher adoption for 4K TV will offset some of the weak revenue in the near-term.
The Phase 2 expansion will allow for SLiM capacity expansion to get to 5-6M/month, up from 2M/month. Initial capacity, though is still two million units, followed by a ramp-up of in the second-half of 2018 for the high end sensors. One thing that changed in the quarterly report compared to last quarter is the potential for a cheaper 3D sensing alternative. If released in 2H/2018, profit margin for the product will add positively to the company’s average.
Takeaway
Himax shares are back below the $8/share market. Those who missed the last runup to $13.95 in Nov/Dec 2017 may want to look at this company again.
