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ASE Technology (ASX) to Post Q1 Earnings: What to Expect?

ASE Technology Holding Co., Ltd. ASX is scheduled to report first-quarter 2021 results on Apr 28.

For the first quarter of 2021, the company expects ATM segment revenues (in US dollar terms) to be in line with fourth-quarter 2020 levels. In the last reported quarter, the company recorded consolidated net revenues of NT$72.75 billion for the ATM segment.

Meanwhile, EMS segment revenues (in US dollar terms) are expected to be similar to third-quarter 2020 levels. The company reported consolidated EMS segment net revenues of NT$53.14 billion in the third quarter of 2020.

ASE Technology Holding Co., Ltd. Price and EPS Surprise


ASE Technology Holding Co., Ltd. price-eps-surprise | ASE Technology Holding Co., Ltd. Quote


Q4 Results at a Glance

In fourth-quarter 2020, the company reported unaudited net revenues of NT$148.88 billion, up 28% from the year-ago quarter’s levels and 21% sequentially.

Diluted earnings during the fourth quarter were NT$2.30 ($0.16 per ADS) per share, up 56.5% from the prior-year quarter and 49.4% sequentially.

Factors to Note

Robust traction for system-in-package (SiP) products is likely to have driven EMS revenue growth in the to-be-reported quarter. Further the acquisition of Asteelflash Group is likely to have  positively contributed to the segment’s performance in the first quarter of 2021.

Additionally, the ATM segment’s first-quarter revenues are likely to reflect solid momentum in the across all product categories (wirebond and advanced packaging, test solutions, consumer, communications and computing).

Notably, in fourth-quarter 2020, the company generated ATM revenues of NT$72.8 billion, up 5% year over year, driven by positive average selling price (ASP) environment. The momentum is likely to have continued in the quarter to be reported owing to the growing popularity of 5G-related devices and strength in communications end-market, driven by coronavirus crisis-induced demand for higher bandwidth amid rapid increase in Internet use.

Besides the company’s investments in geographical expansion may have aided it in acquiring new customers. This is anticipated to have benefited performance in the to-be-reported quarter.

Moreover, the coronavirus pandemic is likely to have hindered production and logistics operations, which might get reflected in first-quarter revenues. A strengthening NT dollar environment remains an added concern.

Continued pandemic-led supply chain disruptions across supplies and components are also likely to have acted as headwinds in the quarter to be reported. Also, longer delivery times for products like lead frames, substrates, and capital equipment, among others are expected to have resulted in higher manufacturing costs.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for ASE Technology this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

ASE Technology has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks, which you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around:

Texas Instruments TXN has an Earnings ESP of +4.25% and holds a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avnet AVT has an Earnings ESP of +0.89% and currently carries a Zacks Rank of 2.

Sirius XM Holdings SIRI has an Earnings ESP of +12.9% and a Zacks Rank of 2.

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