Why Magnachip Semiconductor Stock Tumbled 12% Today
Chip manufacturer Magnachip Semiconductor (NYSE: MX) was falling 12.5% today as of 11:40 a.m. ET. The second-quarter 2022 earnings report is in, and the numbers beat expectations, but Magnachip added its voice to the chorus of semiconductor companies saying that parts of the tech hardware market are getting dicey.
Specifically in Q2, Magnachip said revenue was $101.4 million, down 11% year over year due to supply chain issues for chips used in OLED displays (an industry factor that also negatively impacted OLED supplier Universal Display (NASDAQ: OLED) last week as well). This was partially offset by an increase in the company's "power solutions." Adjusted earnings per share of $0.23 actually handily beat analyst expectations in spite of chip shortages and represented a 53% year-over-year increase.
Magnachip also said it's using this period of uncertainty to repurchase its stock. It's going to repurchase $37.5 million of its own shares in a return of excess cash to shareholders. The board of directors also initiated a "Strategic Review Committee" to explore other value-creation opportunities, including mergers and acquisitions.
Source Fool.com
