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Wednesday, Jul 31
MagnaChip takes off thanks to Q2 beat, $100M buyback
- MagnaChip (MX +16.2%) is making new 52-week highs after soundly beating Q2 estimates and announcing a $100M buyback plan (good for repurchasing 12% of shares at current levels).
- The gains come even though the Korean chipmaker/foundry provider is guiding for Q3 revenue of $215M-$225M, below a $229.6M consensus. A likely reason: shares are still only trading at ~8x 2013E EPS. Also, some Samsung-related weakness may have been priced in.
- A 20% Y/Y increase in foundry revenue (now 51% of total revenue) fueled the Q2 beat. Display chip sales -10%, power management chips +7%.
- Q2 gross margin was 33%, +100 bps Q/Q and +200 bps Y/Y. MagnaChip expects a Q3 GM of 33%-34%.
- Q2 results, PR, CC transcript