Gary Bourgeault
Long only, research analyst, portfolio strategy, media

FormFactor Must Solve Several Problems Before It Produces A Sustainable Profit

The wafer probe card market continues to struggle as mobile devices continue to disrupt the desktop and laptop markets, and companies like FormFactor (NASDAQ:FORM) scramble to make the adjustment in a very competitive business.

While FormFactor blamed restructuring costs and the timing of shipments as the reason for weak cash flow in the first quarter, it guided for cash flow in the second quarter to be level or possibly come in at $3 million. That suggests there are more problems with cash flow than restructuring costs and timing issues experienced in the quarter.

The core issue is the general cost structure the company operates under, which is primarily affected by product architecture. Attempting to offer cost-effective solutions is...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details