Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) posted revenue and non-GAAP net profit growth for the first quarter of 2011, but declined to provide guidance for the second quarter, citing uncertainties over the closing date of its acquisition of a Japanese foundry from Micron Technology Inc. (NYSE: MU) and the subsequent consolidation of revenue.
Tower (which operates under the TowerJazz brand) posted $120.6 million revenue for the first quarter, 6% more than the $113.8 million for the corresponding quarter of 2010. The company said that its growth was "in line with industry trends."
GAAP-based net loss narrowed nine-fold to $5.4 million ($0.02 per share) for the first quarter from $36.2 million for the corresponding quarter. Non-GAAP net profit rose 19% to $31.5 million ($012 per share) from $26.4 million. Non-GAAP earnings per share met the the analysts' consensus.
Tower had $184 million in cash and short-term deposits at the end of March, $101 million more than a year earlier.
Tower CEO Russell Ellwanger told "Globes", "Our revenue rose very strongly, but there is some weakness in the mobile phone segment. The company's momentum isn't based on any single quarter, but on long-term trends. We have very large contract with some customers, which will give us substantial market share. We'll see the results in 2012-13."
"Globes": What is your full-year guidance?
Ellwanger: "The forecast for the industry as a whole was 6% growth, and we believe that we'll double this. In other words, we'll have $570-580 million revenue this year."
The guidance is above the analysts' full-year revenue consensus of $557 million.
What about the share price?
"I can't explain the fall in the share price. Our entire industry is fairly weak in terms of shares. I can tell you that the company continues to grow very strongly, and I believe that, at its current price, the share is very attractive. I'm doing everything to improve the company's condition. Analysts and investors should look at what management says and if it meets it targets. Time will do its thing, and in the long term, I believe that the share price will reflect the company's true value."
Tower's share price fell 4.8% on Nasdaq yesterday to $1.20, giving a market cap of $318 million and was umchanged in early trading on the TASE today at NIS 4.31.
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