AMKR - Amkor Technology - forward P/E is 8.73, well under the industry average of 28.9

Amkor Technology is benefiting from the growing worldwide demand for consumer electronic devices as sales for the first quarter rose 7.4% year-over-year. The company has surprised on estimates three out of the last four quarters on average of 27.44%. Amkor's forward P/E is 8.73, well under the industry average of 28.9.

Full Analysis

Amkor Technology (AMKR) is a manufacturing resource for many of the world's semiconductor companies including Intel Corp., Texas Instruments Inc. and Infineon Technologies AV.

Amkor, a Zacks #1 Rank (Strong Buy), specializes in a broad array of package solutions, formats and sizes, from traditional, "off-the-shelf" leadframe configurations to leading-edge chip scale, flip chip and system-in-package solutions incorporating highly customized designs. The semiconductors are found in a host of products such as digital cameras, cell phones, laptops, video games and MP3 players.

AMKR also offers a range of test engineering services for RF, mixed signal, logic and memory devices. The company has five million square feet of manufacturing space located throughout Asia's key microelectronic technology corridors in China, Japan, Korea, Philippines, and Taiwan.

Amkor Beats Wall Street Estimates for the First Quarter

On Apr 30, the company reported first-quarter earnings that beat Wall Street estimates by 38.46%, or 10 cents a share. Net income increased 108% to $72 million, or 36 cents per share, from the first-quarter 2007.

The first quarter is seasonally the company's slow quarter. Net sales decreased 6.3% sequentially to $699 million but were up 7.4% compared to the first-quarter 2007.

"We exceeded our sales and profitability targets for the first quarter due to select customer demand in certain wireless communications and networking applications, which partially offset the overall seasonal slowing that we had expected," said James Kim, Amkor’s chairman and chief executive officer.

Guidance for the Second Quarter

Amkor provided guidance for the second quarter of sales up 1% to 3% from the first quarter and gross margin at approximately 25%, compared to 25.2% in the first quarter 2008. The company forecast net income in the range of 32 cents to 36 cents per share.

Consensus Estimates Rise

After the earnings report, brokerage analysts hiked estimates for the quarter and the year in response to the company's forecast. For the second quarter, consensus estimates rose two cents in the last week to 30 cents from 28 cents per share. For the full year, estimates rose five cents to $1.27 from $1.22 per share.

Amkor's 2008 P/E is 8.73. Its price-to-book is 2.76. The company has an excellent one year return on equity (ROE) of 33.60%.

Content Courtesy: Zacks Investment Research

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