TowerJazz’s 2Q profit rises as forecast

Israeli microchip maker TowerJazz reported a more than 20% rise in second-quarter net profits on Thursday. It said it was on track for record revenues in the current quarter, in line with analysts’ forecasts as demand continues to grow across its product range.

TowerJazz, which makes chips for smartphones, battery chargers, AC/ DC adapters and image sensors, said it earned 49 cents per diluted share in the second quarter, up from 40 cents a year earlier. Revenue rose 13% to a record $345 million.

The company was forecast to earn 49 cents a share on revenue of $345m., according to Thomson Reuters I/B/E/S.

It expects third-quarter revenue to rise by about 9% to $355m., plus or minus 5%.

Analysts also are forecasting revenue of $355m. in the third quarter and $1.39 billion for all of 2017, which would be an 11% increase on 2016.

TowerJazz operates two plants in Israel, one in California, one in Texas and three in Japan through its joint venture with Panasonic.

It lost money for years following heavy investments in its second chip plant in Israel but has become profitable in the past two years.

Chief executive Russell Ellwanger told Reuters that TowerJazz was looking to increase its capacity and was pursuing different models of acquisition.

This could be through a deal with a seller guaranteeing a certain amount of utilization for a set period, buying an entire business if it meshes well with TowerJazz or going after new technologies.

“I can say in each three of those type of segments we do have activities,” Ellwanger said.

He noted that TowerJazz posted organic growth, which excludes acquisitions, of 26% that resulted in an annual net-profit run rate of $200m., the company having made a profit in the first half of the year of $95.5m.

Its shares are up 27% so far in 2017 after a 32% gain in 2016.