(PR title cont'd) ... in smartphone optical/3D sensing; further sequential and year-on-year growth expected in fourth quarter with revenues of USD 570-610 million and sequentially higher adjusted operating margin; more focused growth strategy around optical, image and audio sensing to drive optical growth opportunities
Premstaetten, Austria (22 October 2018) -- ams (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, reports third quarter results with revenues in the upper third of the guidance range and operating profitability in line with guidance. ams is successfully implementing the expected production ramps in consumer optical sensing while its other businesses continued to develop positively in line with expectations. Ongoing high volume ramps in ams’ consumer business drive further expected sequential and year-on-year growth in the fourth quarter with expected revenues of USD 570-610 million and sequentially higher adjusted operating margin.
Third quarter group revenues were USD 479.6 million, up 92% sequentially compared to the second quarter and up 57% from USD 305.5 million in the same quarter 2017. Adjusted gross margin for the third quarter was 33% (excluding acquisition-related and share-based compensation costs) with IFRS reported gross margin at 31% (including acquisition-related and share-based compensation costs), compared to 41% and 37% respectively in the same quarter 2017.
The adjusted result from operations (EBIT) for the third quarter was USD 60.2 million or 13% of revenues (excluding acquisition-related and share-based compensation costs), in line with previous guidance, while increasing strongly from USD 40.5 million in the same period 2017 (USD 37.3 million or 8% of revenues including acquisition-related and share-based compensation costs, up from USD 12.3 million in the same period 2017). This expected positive result reflects the ramp-up nature of the quarter given increasing production volumes for a recently launched global smartphone platform.
Adjusted net income for the third quarter was USD 18.6 million (excluding valuation effect of option element of foreign currency convertible bond), compared to USD 23.5 million for the same period 2017 (third quarter 2018: USD 68.8 million including valuation effect). Adjusted basic/diluted earnings per share for the third quarter were CHF 0.22/0.21 or USD 0.23/0.22 based on 82,518,624/84,893,054 shares (weighted average; third quarter 2018: CHF 0.82/0.79 or USD 0.83/0.81 including valuation effect; third quarter 2017: CHF 0.28/0.27 or USD 0.28/0.27 based on 83,390,747/86,716,951 shares, weighted average).
Operating cash flow for the third quarter was USD 85.9 million compared to USD -37.6 million in the same quarter last year. Total backlog on 30 September 2018 (excluding consignment stock agreements) was USD 601.7 million compared to USD 544.4 million at the end of the second quarter and USD 512.3 million on 30 September 2017.
ams’ business showed a strong performance in the third quarter of 2018 which was driven by the previously expected significant product ramps in its consumer business. Supported by the anticipated positive demand across end markets, ams recorded third quarter results well in line with previous expectations.
ams’ consumer and communications business was again the biggest contributor to its overall results. As the leader in optical sensing ams offers an unmatched portfolio covering high performance solutions for 3D sensing including VCSEL (Vertical Cavity Surface-Emitting Laser)-based illumination, TrueColor and other high quality display management, spectral sensing, advanced proximity sensing and other optical applications. Leveraging its extensive technology base, ams is a key innovator in optical technologies and continues to advance high performance optical sensing. ams is a leading provider of 3D sensing technology as shown by the large scale 3D sensing ramp ams is realizing this second half for a major global smartphone platform. For this program, ams is ramping very high volumes of differentiated optical systems encompassing complex optical manufacturing and high performance wafer level optics.
ams is strongly positioned to support current and upcoming 3D sensing implementations across different technologies in 2018, 2019 and beyond as 3D sensing momentum continues to increase. As expected, the smartphone market is experiencing multi-year development and implementation cycles for 3D sensing which are due to the complexity of the technology. This has, however, not impacted the clear 3D sensing focus ams observes at smartphone OEMs and ecosystem players targeting broad usage of the technology through the coming years.
ams sees ongoing coexistence of the 3D sensing approaches structured light, ToF (time-of-flight) and active stereo vision and is successful in all three areas. Based on its leading portfolio of 3D sensing technologies, solutions and system know-how, ams addresses face-related and world-facing applications and is engaged in numerous OEM projects and discussions at various stages. This includes current design activities for a world-facing 3D sensing application for a major smartphone OEM.
The announced 3D sensing design-wins for Chinese smartphone vendor Xiaomi and a further major Android smartphone OEM have both moved to production. ams has also won two designs in Android ToF (time-of-flight) 3D systems for two Asian smartphone OEMs leveraging its illumination and VCSEL expertise. ams’ active stereo vision 3D developments with major Android ecosystem players for reference solutions are progressing rapidly at a high level of partner engagement. ams enables a high quality implementation bringing 3D sensing to a wider range of Android devices and expects to provide further details before year end. Based on advanced OEM discussions, ams expects active stereo vision 3D sensing built around ams technology in first smartphones next year.
ams’ differentiated high power VCSEL portfolio is showing significant design momentum in different 3D systems based on the competitive advantages of its VCSEL technology and its 3D system expertise. ams therefore expects to build a strong market position in high performance VCSELs for consumer 3D sensing. ams confirms broad market traction with multiple 3D programs won or in advanced discussion which underlines the strength of its 3D illumination portfolio including dot projection, different types of flood illumination, proximity sensing, and pattern projection.
All in all, ams’ extensive OEM and ecosystem player engagements and design activities across 3D technologies underscore the ongoing momentum in consumer 3D sensing adoption despite the emergence of different timelines in this market.