Himax (HIMX -9%) expects Q3 revenue to fall 5%-12% Q/Q from Q2's $207M. That puts guidance easily below a $223.8M consensus. However, the company expects Q3 EPS of $0.102-$.117, above a $0.10 consensus.
Q3 large-panel driver sales are expected to be "sluggish" due to soft TV/laptop sales and the end of China's TV subsidy program.
Himax is also seeing small/medium-panel driver sales (growing quickly lately) soften due to inventory corrections and model transitions. Moreover, while the popularity of high-res displays is boosting Himax's high-end smartphone margins, the company is "seeing intense price competition" on the low-end.
Q2 gross margin was 24.6%, flat Q/Q and +150 bps Y/Y. GM is expected to rise slightly Q/Q in Q3 (a reason for the healthy EPS guidance).
Sales of display drivers for large-sized panels +7% Q/Q but -19% Y/Y to $64.3M. Driver sales for small/medium-sized panels +22% Q/Q and +32% Y/Y to $110.9M (strong smartphone, tablet, and auto demand).
Non-driver product sales (inc. image sensors, power management ICs, and the LCOS microdisplays Google is interested in) +30% Q/Q and +22% Y/Y to $31.8M. Himax says image sensor demand is growing.