Tweeter Home Entertainment Struggling For Profitability; Large FTP Demand 'Very Strong' (TWTR 3Q05 (F4Q05) Conf Call Quotes)

by: SA Editors

Specialty consumer electronics retailer Tweeter Home Entertainment (ticker: TWTR) reported F4Q05 earnings Tuesday -- its stock has fallen about 11% since, as its net loss figure came in far worse than analyst estimates. Key data points and conference call excerpt:

  • Earnings: Net loss $20 million or 81 cents/share (F$Q04: Loss of $12.6 million, or 52 cents/share)
  • Revenue: $188 million (up 9% y/y)
  • Same store sales: Up 10% y/y
  • Gross margins: Down 0.9%
  • ASP for Advanced TVs: Decreased by ~16%, but unit sales in the category increased 54%.

In the conference call, a Tweeter executive addressed the demand for large flat panel displays and microdisplays (fixed-pixel projection HDTVs):

SCOTT TILLMAN, analyst: Have you seen any shift in screen size, either sequentially or year-over-year or has screen size remained fairly constant?

PHILO PAPPAS, SVP Merchandising at Tweeter: We see a shift moving up. The demand for 50" panels is very, very strong. We are also starting to see greater demand for 60" panels. Some of the other trends we are seeing are in the microdisplay category, things like DLP and Sony's new product... where they feature the 1080P technology and larger screen sizes are even more prevalent in those categories... on-wall TV is running 27% of revenue ahead of 23% last year and microdisplay category is running at 21% versus 19%.

(Quotes are from the CCBN StreetEvents transcript.)

TWTR 1-yr chart: