What caused IMOS's earnings to decline in Q3 and Q4 2024?


Aime
ChipMOS TECHNOLOGIES Inc (IMOS) experienced a decline in earnings in Q3 and Q4 2024 due to a combination of factors:
- Macroeconomic Headwinds: The company faced macroeconomic challenges that impacted its financial performance. These headwinds were particularly evident in Q3 2024, where the company reported flat gross margins and a decrease in overall utilization rates1.
- Cost Increases: Rising operational costs posed a significant challenge for ChipMOS. Despite a 7.2% revenue increase in Q2 2024, the gross margin decreased by 0.2 percentage points compared to Q1 2024 and 3 percentage points compared to Q3 20232. This trend continued in Q4 2024, with the company facing increased cost pressures that affected its profitability1.
- Inventory Adjustments by Customers: In Q3 2024, the company saw a decrease in assembly utilization rates to 58% due to customer inventory adjustments. This reduction in utilization rates led to a decline in earnings1. Similarly, in Q4 2024, the company noted a decline in October revenue, which was attributed to conservative ordering and inventory adjustments by customers3.
- Foreign Exchange Impacts: In Q3 2024, the company experienced a significant increase in net non-operating expenses due to adverse foreign exchange impacts. This factor contributed to a decrease in profit attributable to the company compared to the previous quarter1.
In summary, the decline in IMOS's earnings in Q3 and Q4 2024 was primarily caused by macroeconomic headwinds, cost increases, inventory adjustments by customers, and foreign exchange impacts. These factors collectively created a challenging operating environment for the company, leading to a decline in its financial performance.
Source:
more
less
Continue this conversation 

Explore
Screener
Analysis
Wiki