Tower surpassed analysts 'forecasts: earned $ 28 million, which is 26 cents a share

Analog chip maker Tower surpassed analysts 'forecasts for its revenue and met earnings forecasts for the first quarter of 2021 and released a significantly better forecast than analysts' consensus for the second quarter of the year.
Tower earned $ 28 million, which is 26 cents a share based on US GAAP, in the first quarter of 2021, an increase of 66% over the same quarter in 2020 and an 8% decrease over the fourth quarter of 2020.
Tower earned $ 34 million, which is 31 cents a share in the first quarter of 2021 on a non-GAAP basis - that is, less expenses related to the allocation of options to executives and employees and a reduction in intangible assets. Tower's revenue grew 16% in the first quarter of 2021, compared to the same quarter in 2020, and 0.6% compared to the fourth quarter of 2020 and totaled $ 347 million.
Tower showed organic growth of 21% in its sales in the past quarter compared to the same quarter in 2020.
Tower thus surpassed analysts' average earnings forecasts of $ 345 million last quarter. Olwanger notes that revenue growth has been in all sectors, particularly RF SOI chips for mobile phones following the move to the fifth generation (5G) and also due to the strong growth in demand for data centers for Tower chips that enable data communication at 100 Gbps.
According to him, the chips for voltage converter components for the home network or cell phones, and chips for camera sensors also enjoyed strong demand, and he estimated that the demand for camera sensors will also grow in the second quarter of 2021.
Tower's gross profit increased by 33% compared to the same quarter in 2020, ie twice the rate of increase in revenue, and by 0.3% compared to the fourth quarter of 2020 and amounted to $ 70 million, which is 20.1% of turnover compared to 17.5% of turnover in parallel in 2020 And 20.2% in the fourth quarter of 2020.
Tower's operating profit increased by 98% in the first quarter of 2021 compared to its counterpart in 2020 and decreased by 2.7% compared to the fourth quarter of 2020 and amounted to $ 32 million, which is 9.4% of turnover compared to 5.5% of turnover in parallel in 2020 and 9.7% of turnover in the fourth quarter of 2020.
Tower's operating activities generated a $ 87 million cash flow surplus in the first quarter of 2021 compared to $ 68 million in the same quarter in 2020 and $ 73 million in the fourth quarter of 2020.
Tower expects its second-quarter revenue of 2021 to be $ 360 million. This forecast reflects organic growth of 26% and growth of 16% compared to the second quarter of 2020 - and a record level of quarterly revenue. Olwanger emphasizes that the previous record was reached in the fourth quarter of 2017 when the level of revenue from contracts with Novoton (then Panasonic) and Maxim was significantly higher.
The forecast for the second quarter is 2.5% higher than the average analysts' forecasts for revenue in the current quarter. Tower updates that it has issued all orders worth $ 150 million to purchase the machinery and infrastructure to expand production capacity at its plants starting in the second half of 2021. Production capacity will enter full capacity in a phased manner by the first quarter of 2022.