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Amkor (AMKR) Q3 Earnings to Benefit from End Market Demand

Amkor Technology, Inc. AMKR will report third-quarter 2017 results on Oct 30. Last quarter, the company’s earnings surprise was 27.27%.

We observe that shares of Amkor Technology have gained 2.5% year to date, significantly underperforming its industry’s rally of 27.6%.

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

Factors to Consider

The company 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 in the second quarter 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 third-quarter earnings.

Amkor continues to focus on advanced SiP products and these are expected to contribute significantly to the company’s top line in the to-be-reported quarter. Sales to Greater China fabless customers are also expected to be significant.

For the third quarter, Amkor expects revenues in the range of $1.04-$1.12 billion, up 5% to 13% sequentially. Gross margin is expected within 17–20%. Earnings per share are expected in the range of 10 cents-27 cents on a GAAP basis.

Amkor Technology, Inc. Price and EPS Surprise

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 that Warrant a Look

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

NVIDIA Corporation NVDA, with an Earnings ESP of +0.53% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Priceline Group Inc. PCLN, with an Earnings ESP of +0.04% and Zacks Rank #3.

Extreme Networks, Inc., EXTR with an Earnings ESP of +9.75% and a Zacks Rank #3.

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