Shares of TowerJazz (TSEM) plunged in afternoon trading after reporting quarterly results earlier in the day. TowerJazz, an independent semiconductor foundry, reported second-quarter EPS of 41c on revenue of $335.1M. Analysts had been modeling Q2 EPS of 41c on revenue of $334.93M.

GUIDANCE FALLS SHORT: Looking ahead, Tower guided to Q3 revenue of approximately $335M with a range of plus or minus 5% and, looking a little further out, the company sees revenues of about $360M-$380M in Q4. Analysts currently expect Q3 revenue of $360.02M.

WEAKNESS IN MOBILE: Russell Ellwanger, CEO of TowerJazz, commented that the company continues to see weakness in the mobile sector with recent reductions in customer demand. "For the SiGe infrastructure technology, given its strong and higher than originally expected customer demand, and hence the high number of customers and flow variants that needed to be qualified, the shipment profile from recently added capacity is pushed out slightly", Ellwanger said, adding that "Customers were notified of increased SiGe capacity and starts have been maximized, expecting full revenue realization in the fourth quarter." He also said that "As our customers' mid to long-term demand for SiGe exceeds our newly acquired capacity, we have invested in additional CapEx for our Newport Beach facility, targeted to come online in the first quarter of 2019. Additionally, demand remains strong for discrete Power and all 300mm offerings".

PRICE ACTION: TowerJazz is down 12.5% in afternoon trading to $20.28 per share.