Name: TRIO-TECH INTERNATIONAL Q2 2018 Earnings Call
Start: 2018-02-13T00:00:00.000Z

Executive Summary

Q2 FY2018 delivered strong year-over-year acceleration: revenue rose 16% to $10.552M, diluted EPS doubled to $0.18, and income from operations surged 151% YoY as gross margin improved to 26% of revenue .
Segment drivers: semiconductor testing services +21% YoY to $4.936M and manufacturing +20% YoY to $3.973M, partially offset by distribution −4% YoY to $1.606M .
Operating leverage: operating expenses increased 4% but fell to 20% of revenue, contributing to outsized operating income growth versus last year .
No formal guidance or earnings call transcript was found for Q2; estimate comparisons to Wall Street consensus were unavailable via S&P Global (tool limit), so potential stock catalysts hinge on continued testing/manufacturing momentum and margin mix improvements .

What Went Well and What Went Wrong

Operating earnings surge and margin mix: “Operating earnings surged, as gross margins improved and expenses as a percentage of sales decreased,” reflecting improved product mix and operating discipline .
Broad-based growth across core segments: testing services revenue +21% YoY and manufacturing revenue +20% YoY in Q2 FY2018, demonstrating demand strength in core businesses .
Strategic end-market tailwinds: Management highlighted the automotive industry as a “particularly attractive opportunity,” signaling incremental demand vectors and diversification .

Distribution headwind: Q2 distribution revenue declined 4% YoY to $1.606M, tempering overall growth breadth despite strength in testing/manufacturing .
Limited external communication: No Q2 earnings call transcript and no formal guidance were found, which can reduce near-term visibility for investors tracking quarterly cadence .
Prior-quarter margin pressure context: While Q2 gross margin was 26%, prior-quarter Q1 gross margin was 25.2% and Q4 FY2017 implied ~22.2%, highlighting sensitivity to product/service mix quarter to quarter .

Metric	Q4 2017	Q1 2018	Q2 2018
Revenue ($USD Millions)	$10.638	$10.945	$10.552
Diluted EPS ($USD)	$0.09	$0.16	$0.18
Gross Margin ($USD Millions)	$2.363	$2.760	$2.795
Gross Margin (%)	22.2% (calc from )	25.2%	26%
Income from Operations ($USD Millions)	$0.349	$0.547	$0.698
Operating Margin (%)	3.3% (calc from )	5.0% (calc from )	6.6% (calc from )
Weighted Avg Shares Diluted (Millions)	3.737	3.673	3.793
YoY Revenue Growth (quarter)	+20.7%	+22.0%	+16.0%
YoY EPS Growth (quarter)	+80% (0.09 vs 0.05)	+100% (0.16 vs 0.08)	+100% (0.18 vs 0.09)
vs Estimates (Revenue, EPS)	Unavailable via S&P Global (see Estimates Context)

Segment Revenue ($USD Millions)	Q4 2017	Q1 2018	Q2 2018
Manufacturing/Products	$4.068	$4.765	$3.973
Testing Services	$4.382	$4.605	$4.936
Distribution	$2.151	$1.536	$1.606
Other	$0.037	$0.039	$0.037
Total Revenue	$10.638	$10.945	$10.552

KPI ($USD Thousands unless noted)	Q4 2017	Q1 2018	Q2 2018
Gross Margin	2,363	2,760	2,795
Total Operating Expenses	2,014	2,213	2,097
Income from Operations	349	547	698
Operating Margin (%)	3.3% (calc from )	5.0% (calc from )	6.6% (calc from )
Net Income Attributable to TRT	353	575	673
Diluted EPS ($)	0.09	0.16	0.18

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	Q3/Q4 FY2018	None provided	None provided	Maintained (no formal guidance found)

No Q2 FY2018 earnings call transcript was found; table reflects press release narratives and prior quarter disclosures.

Topic	Previous Mentions (Q4 FY2017, Q1 FY2018)	Current Period (Q2 FY2018)	Trend
Demand in core segments	FY2017: revenue growth across manufacturing, testing, distribution; backlog up to $7.546M indicating demand	Testing +21% YoY; manufacturing +20% YoY in Q2	Improving momentum in testing/manufacturing
Margin mix/operating leverage	Q1: Gross margin 25.2%; OpEx 20.2% of revenue; operating income +45% YoY	Gross margin 26%; OpEx 20% of revenue; operating income +151% YoY	Positive mix/expense leverage
Regional trends	Q1: Strong Singapore and Tianjin operations	Not specifically updated in Q2 press release	Stable to positive
End-market exposure (automotive)	Not highlighted in Q4/Q1	Automotive noted as an “attractive opportunity”	Emerging growth vector
External communication	Q4/Q1 relied on press releases; no robust guidance provided	No Q2 call transcript; no guidance	Neutral/limited visibility

“Building on our solid first quarter performance, Trio-Tech delivered strong financial results once again in the second quarter. Operating earnings surged, as gross margins improved and expenses as a percentage of sales decreased.” — S.W. Yong, CEO .
“Growth in our semiconductor testing and semiconductor equipment manufacturing segments continued to be the primary drivers of these gains… The automotive industry is a particularly attractive opportunity for us.” — S.W. Yong .
“Our Singapore and Tianjin, China operations were especially strong… This was our strongest quarterly financial performance in quite some time.” — Q1 context from S.W. Yong .

No Q2 FY2018 earnings call transcript located; no Q&A available to assess analyst themes or guidance clarifications .

Wall Street consensus (S&P Global) for Q2 FY2018 EPS and revenue was not retrievable due to system request limits; comparisons to consensus are therefore unavailable. Values would be retrieved from S&P Global if accessible.*

Broad-based growth: Q2 revenue +16% YoY to $10.552M with testing and manufacturing leading; distribution modestly down 4% YoY .
Margin and operating leverage: gross margin at 26% and OpEx at 20% of revenue supported a 151% YoY jump in operating income .
EPS momentum: diluted EPS doubled YoY to $0.18, following Q1’s EPS doubling versus prior year—sustained earnings cadence into 2H is the key narrative .
End-market expansion: management flagged automotive as an attractive growth opportunity, which could incrementally support testing/manufacturing throughput and ASPs .
Visibility trade-off: absence of formal guidance and no Q2 call transcript reduces near-term visibility; investors should track upcoming disclosures for confirmation of demand/mix trends .
Short-term trading: positive momentum in testing/manufacturing and margin mix are constructive; any update on backlog or regional strength could act as catalysts.
Medium-term thesis: execution on automotive and sustained margin discipline across Asian operations underpin earnings power, with segment mix the critical variable to monitor quarter to quarter .