I view the result as satisfactory, at least no mention of termination of the contract with Applied Materials, PE still below 10 post bonus issue, best part is that no reduction in dividend indirectly means future business expected to be as usual. Sell down of 8% seems a bit unjustifiable.
It depends. Results really not fantastic tho not dramatic. On the positive side you are right nothing mentioned about terminating their contract with AMAT. On the negative side this quarter FCF doesn't even sustain 1c div payment and next quarter should be even worse so that's concerning for next year special dividend unless they pay it with their net cash which would not be sustainable anyway.
-8% is a lot especially that it remained profitable but the share price rebounded a lot since its lowest a few weeks ago.
My concern is that there will not have any catalysts on the near term. Only bad news recently... Really hope this is temporally but until we have some catalysts it might go back to 50c which was its level in 2013. Finger crossed it won't go too low
Quarterly results not as rosy as last year.... also hint of lower earnings next quarter... plus bad market sentiments... retailers cashing out from the recent run up...
It has dropped more than 20% from its theoretical xb price, which already priced in the negative expectation from the recent selling spree, but the results last night is not as negative as I personally expected. -ve 20% just because of slight reduction of revenue, profit and FCF, I really hope for a quick bounce the next days..
(07-08-2014, 02:11 PM)valuebuddies Wrote: [ -> ]It has dropped more than 20% from its theoretical xb price, which already priced in the negative expectation from the recent selling spree, but the results last night is not as negative as I personally expected. -ve 20% just because of slight reduction of revenue, profit and FCF, I really hope for a quick bounce the next days..
What goes up has to come down eventually. Ums lovers will have to decide if the quarterly is a blip or start of a downtrend.
I would think insiders already know mobile market for the moment should be consolidating after the recent boom of past year. SEMI booktobill should show a clearer picture.
via Xperia Z1 with Android 4.4.4 running tapatalk.
(07-08-2014, 01:46 PM)ethys Wrote: [ -> ]On the negative side this quarter FCF doesn't even sustain 1c div payment and next quarter should be even worse so that's concerning for next year special dividend unless they pay it with their net cash which would not be sustainable anyway.
Hi ethys,
What do you think has contributed to the reduction of FCF generated from 10.3 million (in 1Q2014) to 3.9 million (in 2Q2014) ? Given that OCF Before Change in Working Capital in 1Q2014 of 11.6 million is only 1.0 million more than in 2Q2014 of 10.6 million.
1H2014 has already generated FCF of 3.3 cents per share
If 2H2014 could generate FCF of 1.7 cents per share => 5.0 cents
If 2H2014 could generate FCF of 2.7 cents per share => 6.0 cents
FCF/Revenue:
FY2010 = 23.7 / 129.0 = 18.4%
FY2011 = 31.6 / 114.4 = 27.6%
FY2012 = 29.3 / 113.2 = 25.9%
FY2013 = 25.8 / 120.5 = 21.4%
1H2014 = 14.2 / 62.998 = 22.5%
Pick the worst case combination or scenario for FY2014 from the above, excluding FY2010:
FY2014: revenue = 113.2 ; Conversion rate = 21.4%
=> conversion rate for 2H2014 = 20%
FCF (2H2014) = (113.2 - 62.998) x 0.20 / 430 = 2.2 cents per share => 5.5 cents (post bonus) or 6.875 cents per share (pre-bonus) for FY2014.
(vested)
Hi Boon,
To me the decrease in 2Q FCF is due to a decrease in revenue but also mostly to a 5M payable they paid this quarter.
While they explained what this payable was I am concerned by their capex which seem to be on the rise again after enjoying almost no capex in 2013. They said they will have to spend another 1.5M next quarter and that's probably not all. That plus the fact their revenue in 3Q should be even lower is concerning for this year FCF.
That's why I don't think we can extrapolate 2013 conversion factors to 2014 to guess this year FCF.
UMS is still a sound company but since there will have now some concerns about next year dividends + recurrent concerns about their contract with AMAT post 2017 I think we might see some pressure until we finally hear some good news hopefully in 4Q
(08-08-2014, 08:40 AM)ethys Wrote: [ -> ]Hi Boon,
To me the decrease in 2Q FCF is due to a decrease in revenue but also mostly to a 5M payable they paid this quarter.
While they explained what this payable was I am concerned by their capex which seem to be on the rise again after enjoying almost no capex in 2013. They said they will have to spend another 1.5M next quarter and that's probably not all. That plus the fact their revenue in 3Q should be even lower is concerning for this year FCF.
That's why I don't think we can extrapolate 2013 conversion factors to 2014 to guess this year FCF.
UMS is still a sound company but since there will have now some concerns about next year dividends + recurrent concerns about their contract with AMAT post 2017 I think we might see some pressure until we finally hear some good news hopefully in 4Q
Hi ethys,
I understand your concern on Capex but current spending looks normal to me.
1H2012 : Revenue = 68.629 m; FCF = 14.5 m, AFTER spending nothing on Capex
2H2012 : Revenue = 44.583 m; FCF = 14.8 m, AFTER spending 1.747 m on Capex
1H2013 : Revenue = 60.666 m; FCF = 13.7 m, AFTER spending nothing on Capex.
2H2013 : Revenue = 59.802 m; FCF = 12.1 m, AFTER spending 1.994 on Capex.
1H2014 : Revenue = 62.998 m; FCF = 14.2 m, AFTER spending 4.209 on Capex.
Projection:
2H2014 : Revenue = 50.000 m; FCF = 9.5 m, AFTER spending 1.5 million on Capex
My extrapolation is based on worst case scenario of past 3 year results – I could be wrong.
I would not complain if 2H2014 turn out to be like 2H2012.
(vested)
Demands in 3Q are typically at the lowest - is it a concern ?
________________________________________________________________________________________________________________
"As the Group moves into third quarter of the year, it is entering a period where its customers’ demands are typically at the lowest. However, the Group is optimistic that demands should pick up towards the last quarter of 2014." - Management comment
[Image: mj78ra.jpg]
(vested)
AMAT just reported results for its third quarter of fiscal 2014 ended July 27, 2014.
SSG : Revenue (USD million):
2Q2013 = 1,291
3Q2013 = 1,272
4Q2013 = 1,243
1Q2014 = 1,484
2Q2014 = 1,584
3Q2014 = 1,476 ( 7% LOWER than 2Q2014)
SSG : New Orders (USD million)
1Q2013 = 1,363
2Q2013 = 1,551
3Q2013 = 1,203
4Q2013 = 1,390
1Q2014 = 1,569
2Q2014 = 1,664
3Q2014 = 1,565 ( 6% LOWER than 2Q2014)
SSG : Backlog (USD million)
1Q2013 = 1,071
2Q2013 = 1,265
3Q2013 = 1,173
4Q2013 = 1,320
1Q2014 = 1,366
2Q2014 = 1,452
3Q2014 = 1,515 ( 4% HIGHER than 2Q2014)
Comments:
1) SSG net sales of 1.476 billion were down 7% - slightly below Management expectation - due to some changes in the timing of customer fab
2) New SSG Orders of 1.565 billion were down 6% sequentially - seasonally, this time of the year tend to be slower, as explained by the Management.
3) Management expects SSG net sales to be down 1% to 7% in 4Q2014 (3Q2014 for UMS).
4) SSG backlog at a new 6-year high – sooner or later these would trend down and being converted into “revenue” – likely to happen in 1Q2015 (or 4Q2014 for UMS).
5) Looking at the market as a whole, the Management maintains its view that 2014 wafer fab equipment spending could be up 10% to 20% - but believe that 2015 would be stronger than 2014, as the foundries ramp FinFET, more customers invest in 3D NAND and DRAM spending increases.
6) The overall performance trend of SSG and its business outlook seem to be consistent with that of UMS:
- Revenue for latest reported quarter was down compare to previous quarter.
- Revenue for next quarter (4Q for SSG & 3Q for UMS) is expected to be even lower before picking up later in subsequent quarter.
Q3 2014 Earnings Call
http://seekingalpha.com/article/2425525-...t?uprof=45
(vested)