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Why Himax Techologies Stock Is White-Hot Today

By Rich Smith - Apr 7, 2021 at 12:10PM

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The first quarter was great. The second quarter will be, too.

What happened

Shares of Taiwanese fabless semiconductor company Himax Technologies (HIMX -5.97%) stock jumped more than 12% in early trading on the Nasdaq Stock Market, before retreating to a 5.8% gain as of noon EDT.

It's not hard to figure out why: This morning, Himax released an earnings preannouncement confirming that it earned far more than Wall Street expected in the first quarter of 2021.  

Glowing semiconductor chip

Image source: Getty Images.

So what

How much more? Heading into Q1, analysts had forecast that Himax would earn about $0.31 per share on total sales of $295 million. In fact, the company says it earned more than $0.38 per share, and on sales of $309 million.  

Himax's results seem to have surprised even itself, exceeding previous guidance issued as recently as Feb. 4, 2021. When the official results come out next month, the company expects to report year-over-year sales growth of 67%, and a gross profit margin of 40.2% -- up 17.5 percentage points from last year's Q1.

And net earnings will be up 16.5 times from Q1 2020 levels.

Now what

The good news might not end there, either. As Himax explains, "revenues, gross margin and EPS all hit new records in this quarter," and "thanks to persisting demand across our major business segments ... the global semiconductor shortage has not shown signs of receding." Accordingly, Himax -- one month before Q1 earnings even come out officially -- is already prepared to predict "another strong financial result for the second quarter."

In other words, before the Q1 earnings beat is even official, Himax is predicting a second earnings beat in Q2. No wonder investors are pleased.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Himax Technologies, Inc. Stock Quote
Himax Technologies, Inc.
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