* Q4 non-GAAP EPS $0.99 vs $1.60 year ago
* Q4 revenue $147.6 million vs $150 mln forecast
* Sees Q1 revenue $110-$120 mln
* Shares down 6.1 percent in Tel Aviv
By Tova Cohen
TEL AVIV, Feb 14 Chipmaker TowerJazz
forecast a drop of about 32 percent in first-quarter revenue due
to a contractual decrease in sales to Micron at its Japanese
plant and as a consumer shift from PCs to tablets continues to
affect part of its business.
Israel-based TowerJazz on Thursday forecast revenue
of $110 million to $120 million in the first quarter, down from
$168 million in the year-earlier period. Analysts were
forecasting revenue of $142.5 million in the quarter, according
to Thomson Reuters I/B/E/S.
Shares in the firm, which makes chips used in smartphones
like Apple's iPhone and Samsung's Galaxy
models as well as battery chargers and AC/DC adapters, were down
6.1 percent to 28.25 shekels in midday trade in Tel Aviv.
TowerJazz Chief Executive Russell Ellwanger said the company
sees this revenue level as short term, in line with its supply
agreement with Micron Technology, which sold its plant in
Nishiwaki, Japan, to TowerJazz in 2011.
"The company sees growth through the year in revenue and
profit," Ellwanger told Reuters. "The second half of the year
will be stronger than the first half. I am very convinced the
second quarter will be stronger than the first."
Besides a tapering off in sales to Micron, which was planned
under the deal signed between the two companies, TowerJazz is
also facing a decline in its discrete components business.
Weakness in sales of discretes, chips that are not
integrated circuits (IC), was seen already in the third quarter.
As consumers opt to buy tablets instead of more expensive
and larger personal computers, sales of discrete components have
fallen. Manufacturers of the slim tablets use fewer discrete
components, which take up a relatively large area.
But Ellwanger believes the market for discrete components
will recover as consumers tend to replace tablets frequently,
both because they are cheaper than PCs and because their sales
are often driven by fashion rather than functionality.
"I think over time, probably the amount of discretes that
will be demanded will stay the same," he said. "Going into the
second quarter I am seeing a strengthening of our discrete
TowerJazz posted fourth quarter earnings excluding one-time
items of 99 cents a share, down from $1.60 a year earlier as
revenue fell to $147.6 million from $154.6 million, at the low
end of the company's own forecast of $147-$157 million.
Analysts expected TowerJazz to earn 53-55 cents a share on
revenue of $150 million. Earnings were better than expected due
to lower than forecast costs.