Himax Tech CEO Calls Q1 Low Point, Foresees Sales Surge in Automotive Sector

Zinger Key Points
  • Himax Q1 revenue beats estimates: Declines 15% Y/Y to $207.55M, surpasses $203.40M forecast.
  • Himax announces $0.29 annual dividend: Expects Q2 revenue growth, especially in automotive.

Himax Technologies, Inc HIMX reported a fiscal first-quarter revenue decline of 15.0% year-on-year to $207.55 million, beating the analyst consensus estimate of $203.40 million. Net revenues decreased 8.8% Q/Q.

Earnings per ADS was $0.07, beating the analyst consensus estimate of $0.05.

The gross margin reached 29.3%, outperforming the guidance of around 28.5%.

Revenue from large display drivers was $31.3 million, a decrease of 7% Q/Q due to seasonally soft macroeconomic conditions compounded by ongoing production and inventory control measures by the company’s leading panel customers. 

Small and medium-sized display driver revenue was $144.3 million, a decrease of 11.5% Q/Q.

Revenue for non-driver business was $32.0 million, up 3.4% Q/Q, attributable to a resurgence in orders for large-sized display Tcon products.

Operating expenses for the quarter declined 0.6% Y/Y to $50.7 million.

The operating income was $10.0 million compared to $17.6 million a year ago, and the margin declined by 240 bps to 4.8%, primarily driven by lower sales. 

As of March 31, 2024, the company’s inventories were $201.9 million, markedly lower than $217.3 million last quarter.

Himax held $261.7 million of cash, cash equivalents, and other financial assets as of March 31, 2024. HIMX generated a positive cash flow of $56.7 million, compared to $66.4 million a year ago.

Dividend: The company declared an annual cash dividend of $0.29 per ADS, payable on July 12, 2024.

“We believe Q1 will be the low point for this year and see sales starting to pick up in Q2, especially in the automotive sector. With several other upcoming demand catalysts on the horizon, including major sporting events and festival shopping seasons, business momentum is expected to continue to steadily improve throughout the second half,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax.

“The automotive display market is experiencing a megatrend of expanding quantities, sizes, and sophistication of displays within vehicles as fancy displays are increasingly becoming a major selling point for car makers. As the leader in the automotive display IC business, Himax is poised to benefit from this trend, which implies higher content value per vehicle for display semiconductor vendors such as us, leading to sustainable growth slated for the next few years,” concluded Mr. Jordan Wu.

Q2 Guidance: HIMX expects net revenues to grow 8.0%—13.0% sequentially vs. the estimate of $219.75 million. It projects a gross margin of 31.5%—33.5% primarily because of higher sales from automotive and Tcon businesses and EPADS of $0.13 – $0.17 versus the $0.09 estimate.

Price Action: HIMX shares traded higher by 10% at $5.74 at the last check Thursday.

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