Reports of the sensor maker AMS’ shares has jumped 20% today, Wednesday after the company made it known it expect the impact from the COVID-19 pandemic to be limited in the current quarter while posting its first quarter revenues within the upper half of it’s forecast.
AMS is currently planning to take over the leading car headlight producer Osram, made said consumer solutions and programs for smartphone makers remained one of its highest source of demands despite the pandemic. “The second-quarter guidance is much better than expected,” said Credit Suisse analysts.
As that grows, the automobile and industrial business part of the company is expected to still face a stronger impact despite the second quarter because travel bans continues worldwide and most people are still being confined into their homes as the number of cases during the pandemic gets bigger.
The gains in AMS’ shares erased part of their 60% drop this year amid investor worries about the level of demand from its main customer Apple as well as the weak auto trends at Osram and high levels of debt.
AMS’s upbeat outlook echoed comments from Asian tech firms including Huawei [HWT.UL] and Foxconn.
Meanwhile Samsung Electronics said on Wednesday thata iti’s expecting profit decline in the Q2 of the year (2020) due to the Coronavirus pandemuc because of the slowest rate of smartphone and TV purchases even though the chip business is expected to still remain solid. AMS’s revenue came in at $501.2 million and adjusted earnings before interest and tax (EBIT) reached $101 million in the three months through March, the Austrian group said.
AMS made most of its revenue from sensors made for Apple’s iPhone devices which has seen the company’s revenue growing to about US$480 – 520 million in the first quarter and an EBIT Margin of about 19 – 21%. As for the second quarter of the year, AMS forecast revenues of US$440 – 480 million as well as an adjusted operating (EBIT) margin of 17 – 20%.
Because of the Coronavirus pandemic, the company has had new customers in the computed tomography (CT) scanners industry which is very important in clinical diagnostics for the disease. AMS also had a business disruption in China despite having no production facility in the East Asia country. This came amid the onset of the pandemic during the first quarter of the year affecting operations of the business.
AMS’s first-quarter operating cash flow was $235 million versus $273.5 million in the fourth quarter. Net debt fell to $1.55 billion per end-March from $1.75 billion at the end of December, it said. The Osram acquisition was fully on track, AMS added.