UPDATE 1-Israeli chip maker TowerJazz Q2 profit beats estimates
* Q2 adjusted EPS $0.62 vs $0.42 forecast
* Q2 revenue $234.1 mln vs $228.8 mln forecast
* Forecasts Q3 revenue $225 mln, plus/minus 5 pct (Adds comments from CEO interview, share reaction)
By Tova Cohen
TEL AVIV, Aug 4 (Reuters) - Israeli chipmaker TowerJazz on Monday beat estimates with strong second-quarter net profit due to revenue for the first time from its joint venture in Japan with Panasonic Corp and sees third-quarter revenue in line with forecasts.
It earned 62 cents per share excluding one-time items, compared with EPS of 47 cents per share a year earlier as revenue grew 87 percent to $234.1 million. TowerJazz was forecast to earn 42 cents a share excluding items on revenue of $228.8 million, according to Thomson Reuters I/B/E/S.
TowerJazz shares were up 1 percent to 36.87 shekels in morning trade in Tel Aviv
Chief Executive Russell Ellwanger said revenue from the company's top five customers in the quarter rose 50 percent from a year ago while a record 242 new products entered its Israeli and U.S. factories, up from 130 in the second quarter of 2013.
"That's a very strong indicator of what will be happening in one to two years from now," Ellwanger told Reuters.
TowerJazz closed negotiations with third party customers which should reach annual revenue of well beyond $100 million within the next three years.
"We expect these first contracts and agreements to begin volume production ramp in the second half of 2015," he said.
TowerJazz lost money for years following heavy investment in a second chip plant in Israel.
The maker of chips for smartphones, battery chargers and AC/DC adapters has a 51 percent stake in its new joint venture, under which Panasonic transferred three factories for the production of semiconductors for cars and other products.
Ellwanger said Tower Panasonic Semiconductor Co was integrated for the first time in the second quarter.
The company's target was to achieve an annual revenue run rate of $1 billion in 2015, he said.
TowerJazz expects third quarter revenue to be $225 million with an upward or downward range of 5 percent. Mid-range guidance represents 70 percent year over year growth.
The third quarter will be the first to realise no revenue from Micron Technology, which sold its Nishiwaki, Japan to TowerJazz in 2011. The plant has ceased operations.
Analysts on average are forecasting revenue of $221 million.
($1 = 3.415 shekels) (Additional reporting by Ari Rabinovitch; Editing by Steven Scheer)