Stats ChipPac

Stats ChipPac booked 3Q13 net profit of US$13.3m (+320%) and revenue at US$400.8m (+2%) Net income was aided by an insurance settlement of $19.6m, while the previous year saw good will and equipment impairments of US$16.5m. For 9M13, the company posted a net loss of US$35.4m on revenue of US$1.2b, as the period registered costs of US$36.5m for the planned closure of the company's Malaysia plant and US$16.3m of redemption expense. The grp’s CEO notes that the company continues to see a bifurcation of the smartphone market with sluggish demand in the high- end segment partially offset by strength in the low-cost segment.To align costs with current business conditions, STATS will undertake restructuring actions to reduce costs in operations and support functions. Based on current visibility, expect 4Q13 revenues to be flat or see a 5% decrease vs the prior quarter. Expect capital expenditure during the fourth quarter to be approximately US$90-US$100m, including ~US$19-US$21m for progressive construction of the new factory in Korea.