For much of the last year, Himax Technologies (NASDAQ:HIMX) tried forming an uptrend, only to hold a trading range pattern. Though the stock price almost doubled from the March lows, better fundamentals suggest that the company will continue to deliver on results.
Himax posted preliminary third-quarter results on Oct. 6. The supplier of display drivers and other chip products said that revenue will grow 28.3% sequentially and 46.1% year-on-year, to $239.9 million. Gross margins will rise slightly. It will earn 4.9 cents, surpassing the two cents to 2.8 cents per diluted ADS. The five-fold sequential increase in earnings is a welcome change.
Himax said that its business momentum is strong across all of its business sectors. When it officially reports results, investors may examine the segments demonstrating the sustainable margin lift. If Himax revealed any big contract wins for its time-of-flight or wearable display solutions, the stock may attract more buyers.
In the last decade, Himax pinned its hopes on virtual reality and augmented reality, a trend that did not hold up. Though it is not likely to return in high volume, the company may offset the business with other chip supply deals.
