ASE Technology Holding Co., Ltd. (NYSE:ASX) Q3 2024 Earnings Call October 31, 2024 3:00 AM ET
Company Participants
Ken Hsiang - Head, Investor Relations
Joseph Tung - Chief Financial Officer
Conference Call Participants
Sunny Lin - UBS
Gokul Hariharan - JPMorgan
Bruce Lu - Goldman Sachs
Rick Hsu - Daiwa Securities
Charlie Chan - Morgan Stanley
Laura Chen - Citi
Ken Hsiang
Hello. I am Ken Hsiang, the Head of Investor Relations for ASE Technology Holdings. Welcome to our Third Quarter 2024 Earnings Release. Thank you for attending our second consecutive Typhoon holiday earnings release. Please refer to our Safe Harbor notice on Page 2. All participants consent to having their voices and questions broadcast via participation in this event. If participants do not consent, please disconnect at this time. I would like to remind everyone that the presentation that follows may contain forward-looking statements. These forward-looking statements are subject to a high degree of risk, and our actual results may differ materially. For the purposes of this presentation, dollar figures are generally stated in New Taiwan unless otherwise indicated.
As a Taiwan-based company, our financial information is presented in accordance with Taiwan IFRS. Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those presented by our subsidiary using Chinese GAAP. I’m joined today by Joseph Tung, our CFO. For today’s presentation, I will be going over the financial results and company outlook. Joseph will then be available to take your questions during the Q&A session that follows. We are altering our Q&A format slightly. During the Q&A session, I will be moderating, receiving and clarifying each question and repeating your questions to Joseph.
With that, let’s get started. The third quarter ATM seasonality came in slightly better than originally anticipated. The pickups were mostly driven by strength in leading-edge advanced packaging and the seasonal ramps of some communications devices. Our overall equipment utilization was between 65% to 70%. For our EMS business, in the third quarter, demand for our services was also slightly ahead of our initial expectations. However, the higher demand was most likely attributable to an earlier seasonality.
Please turn to Page 3, where you will find our third quarter consolidated results. For the third quarter, we recorded fully diluted EPS of TWD2.17 and basic EPS of TWD2.24. Consolidated net revenues increased 14% sequentially and 4% year-over-year. We had a gross profit of TWD26.4 billion with a gross margin of 16.5%. Our gross margin improved by 0.1 percentage points sequentially and 0.3 percentage points year-over-year. The sequential improvement in margin is principally due to improved operating leverage offset by higher EMS product mix. Our operating expenses increased by TWD0.9 billion sequentially, and by TWD1.4 billion annually. The sequential increase in operating expenses are primarily due to higher labor, bonus-related expenses and other administrative expenses. The year-over-year increase in operating expenses is primarily attributable to continued R&D staff-up and other labor-related costs.