Markets
MX

Why Shares of MagnaChip Semiconductor Popped Today

What happened

Shares of MagnaChip Semiconductor (NYSE: MX) jumped on Wednesday after the semiconductor manufacturer updated its guidance for the second quarter. MagnaChip raised its outlook for both revenue and gross margin, leading investors to push the stock up 11.9% by 1:15 p.m. EDT.

So what

MagnaChip now expects to report revenue of at least $194 million in the second quarter, which ends on June 30. That's up substantially from the company's prior revenue guidance of $173 million to $181 million.

A circuit board.

Image source: Getty Images.

Previously, MagnaChip had called for 30% revenue growth from its OLED display drivers and flat revenue from its foundry business relative to the first quarter. However, the company now expects both businesses to exceed those initial expectations. The power standard products business is also performing better than first anticipated.

MagnaChip also raised its guidance for gross margin, now forecasting that metric to be at least 21% in the second quarter. That's up from previous guidance calling for gross margin between 16% and 18%.

Now what

In addition to boosting its guidance, MagnaChip also said that its strategic evaluation of its foundry business is ongoing. The company is still considering a variety of options, including joint ventures, strategic partnerships, and acquisitions.

MagnaChip will report its full second-quarter results after the market closes on July 30. With those results now predicted to surpass expectations, it's no surprise the stock is soaring.

10 stocks we like better than MagnaChip Semiconductor
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and MagnaChip Semiconductor wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of March 1, 2019

 

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

MX

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More