TowerJazz swings to profit on gain from Panasonic joint venture
* Q1 net profit $39 mln vs $23 mln loss
* Revenue up 18 pct to $132.7 mln
* Forecasts Q2 revenue in range of 5 pct above or below $230 mln
TEL AVIV, May 14 (Reuters) - Israeli chipmaker TowerJazz reported on Thursday its first quarterly net profit in 2-1/2 years due to a one-time acquisition gain from its joint venture in Japan with Panasonic.
It had a first-quarter net profit of $39 million - its first quarterly net profit since the third quarter of 2011 - compared with a loss of $23 million a year earlier.
The 2014 quarter included a $150 million gain from the value assigned to its stake in TowerJazz Panasonic Semiconductor Co as well as a one-time provision of $71 million from TowerJazz's decision to close its plant in Nishiwaki, Japan.
Excluding one-time items, its net profit jumped to $19.5 million from $6.5 million a year earlier. Revenue grew 18 percent to $132.7 million.
TowerJazz has lost money for years following heavy investment in a second chip plant in Israel, but Chief Executive Russell Ellwanger told Reuters the company was targeting reaching sustainable net profit by the end of this year.
Ellwanger said the joint venture with Panasonic, launched last month, will begin to generate revenue for TowerJazz in the second quarter and initially can range between $90-$105 million per quarter.
The Israeli maker of chips for smartphones, battery chargers and AC/DC adapters has a 51 percent stake in the venture, under which Panasonic transferred three factories for the production of semiconductors for cars and other products.
TowerJazz expects revenue in the second quarter to be $230 million with an upward or downward range of 5 percent. The mid-range forecast represents 84 percent year-over-year growth. Ellwanger said the company's target was to achieve an annual revenue run rate of $1 billion in 2015.
TowerJazz will move about 100 workers out of 850 from its Nishiwaki plant to other positions in the company and about 40 workers will move to Micron Technology, which sold the plant to TowerJazz in 2011. TowerJazz has hired an employment company to find positions for the remaining workers.
"Most likely the fourth quarter will be the first quarter of seeing benefit from stopping that operation," Ellwanger said, adding it will reduce annual fixed costs by $130 million. (Reporting by Tova Cohen)