Fabless semiconductor company Himax Technologies ( HIMX ) was down ~7% after reporting a Y/Y decline in Q2 results and Q3 revenue guidance.
Q2 revenue of $312.61M was 14.4% lower on a yearly basis.
Non-GAAP EPADS stood at $0.439.
Gross margin came in at 43.6%.
The company had $461.6M of cash, cash equivalents and other financial assets as of Jun. 30, compared to $270.4M at the same time last year.
For Q3, revenues are expected to decrease 67.3% Y/Y.
Non-IFRS gross margin is expected to be around 35.5% to 37.5%, non-IFRS profit to be 11.6 cents to 15.6 cents per diluted American depositary share and IFRS profit to be 0.2 cents to 4.2 cents per diluted American depositary share.
Decades-high inflation, rapidly rising interest rates in addition to the ongoing war and potential for more China city lockdowns have caused widespread disruption to demand, according to the company's earnings release.
"The sudden halt in demand, together with the length of our production lead time, has led to elevated inventory level for Q3. While in the midst of this inventory offloading cycle, we are naturally cutting back on new orders with our suppliers," CEO Jordan Wu said.
Supplier charges have been factored in the Q3 guidance and is the predominant factor for the Q3 gross margin contraction, according to Wu.
The revenue growth is expected to be restored in Q4, boosted by healthy demand for automotive and tablet segments.
The sequential decline in Q4 gross margin is likely to be modest, considering the price support from a few product areas, notably automotive, Tcon, AMOLED and AI image sensing.
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Himax Technologies trades lower on Q2 earnings decline, Q3 guidance