Tower Semiconductor Ltd. posted a wider loss in the third quarter, hammered by declining revenue and amortization charges although the company said its financial results improved sequentially, continuing a trend that began earlier in the year.
The Israeli chipmaker reported its net loss expanded to $31.8 million in the third quarter ended Sept. 30 from a net loss of $18.2 million in the comparable 2012 quarter. Sales tumbled to $132.56 million, down 14 percent, from $154.59 million, in the September 2012 quarter. Gross profit margin sank to 3.3 percent from 12.4 percent in the year-ago quarter. Investors didn’t like the news and fled the stock, driving down TowerJazz’s market value by almost 6 percent during trading today.
TowerJazz said sales improved sequentially, however, from $125.24 million in the second quarter. In a statement TowerJazz said it expects the sequential revenue improvement to continue in the fourth quarter and predicts sales for the period would be between $133 million and $143 million.
“The sequential growth we have demonstrated in Q1 through Q3 was in line with our expectations based on strong alignment to customer forecast and project execution,” said Russell Ellwanger, CEO of TowerJazz in a statement. “The increase in new masks entering the fab amounted to about a 35% year to date increase as compared to 2012. This is the base for core business growth, a precursor of which is our guidance for Q4 revenue, reflecting quarterly growth nicely above the foundry market trend.”