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Hutchinson Technology Incorporated (HTCH)

  • Mon, Aug. 3, 12:46 PM
    | Mon, Aug. 3, 12:46 PM | 8 Comments
  • Fri, Jul. 31, 2:17 PM
    • Given a backdrop of weak PC sales and soft guidance from Seagate/Western Digital, Hutchinson's (NASDAQ:HTCH) forecast for hard drive suspension assembly shipments to rise 10%-20% Q/Q in (seasonally stronger) FQ4 is going over well. ASP is expected to slip to $0.57-$0.58 from FQ3's $0.59.
    • Also: Hutchinson has unveiled an SMA optical image stabilization (OIS) actuator said to be 70% thinner than its original offering, as well as much cheaper to produce. CEO Rick Penn: "We believe this new design has fundamental advantages that bring superior value and capability to the marketplace and that the product is well aligned with the needs of camera module and smartphone manufacturers."
    • Key numbers: Helping FQ3 EPS beat estimates in spite of a revenue miss: Gross margin was 8.8%, down from 10% in FQ2 but up from 6% a year ago. R&D spend rose by ~$1M Y/Y to $5.17M,; SG&A spend rose by ~$500K to $5.73M. Hutchinson ended FQ3 with $36.3M in cash/investments, and $128.6M in debt.
    • FQ3 results, PR
    | Fri, Jul. 31, 2:17 PM | 4 Comments
  • Fri, Jul. 31, 12:46 PM
    | Fri, Jul. 31, 12:46 PM | Comment!
  • Thu, Jul. 30, 4:03 PM
    • Hutchinson Technology (NASDAQ:HTCH): FQ3 EPS of -$0.26 beats by $0.05.
    • Revenue of $54.67M (-8.5% Y/Y) misses by $0.21M.
    • Press Release
    | Thu, Jul. 30, 4:03 PM | Comment!
  • Wed, Jul. 29, 5:35 PM
  • Mon, Jul. 13, 2:06 PM
    • Hard drive assembly supplier Hutchinson (HTCH -3.2%) is off after Seagate issued a calendar Q2 warning amid a backdrop of weak PC sales. Notably, Seagate itself is higher following the warning - many expected weak results - as is Western Digital.
    • Hutchinson is now down 58% YTD, and trades for just 0.2x an FY15 (ends in September) sales consensus of $253.2M.
    | Mon, Jul. 13, 2:06 PM | Comment!
  • Thu, Jul. 9, 10:02 PM
    • IDC estimates global PC shipments tumbled to 66.1M in Q2, falling at a sharper Y/Y clip than Q1's 6.7% and about 1% faster than expected. Gartner is slightly less harsh, estimating shipments fell 9.5% to 68.4M.
    • Factors blamed for the decline: Inventory reductions ahead of the Windows 10 launch (set for July 29), a strong dollar (has led to higher overseas prices), and tough Y/Y comps caused by the 2014 boost in business PC sales caused by the end of Windows XP support. With tablet sales under pressure as well, tablet cannibalization is less of a factor than before ... but rising smartphone/tablet usage still appears to be taking a toll on PC upgrade rates.
    • Gartner sees full-year shipments falling 4.4%. IDC still expects low-to-mid single-digit declines in 2H15, before volumes stabilize in future years. It sees the Windows 10 launch going "relatively well," but cautions Microsoft's (NASDAQ:MSFT) decision to provide free upgrades to Windows 7/8 users will limit its impact on PC sales.
    • Continuing a recent trend, market leaders grabbed share from smaller rivals. IDC estimates #1 Lenovo's (OTCPK:LNVGY) share rose to 20.3% from 19.4% a year ago, #2 HP's (NYSE:HPQ) to 18.5% from 18.2%, and #3 Dell's to 14.5% from 14%. Acer (OTC:ASIYF) and Asus (OTC:AKCPF) are respectively given 6.6% and 6.5% shares
    • Curiously, IDC has Apple (NASDAQ:AAPL) ranked #4 globally, with its share rising to 7.8% from 5.9% via 5.1M Mac shipments (could imply a 15%+ revenue share), but Gartner doesn't have the company in its top-5. IDC and Gartner respectively assign Apple 13.5% and 12.7% U.S. shares. In the past, IDC's Mac shipment estimates have been notably different from the quarterly figures Apple would later report.
    • Near-term expectations for PC sales are already quite low, following Intel's (NASDAQ:INTC) Q1 warning, AMD's Q2 warning, Micron's (NASDAQ:MU) June 25 results/guidance, and plenty of other negative news. Intel's Q2 report arrives on July 15.
    • Other PC industry names: NVDA, STX, WDC, HTCH
    | Thu, Jul. 9, 10:02 PM | 73 Comments
  • Fri, May 1, 10:05 AM
    • While Hutchison's (NASDAQ:HTCH) FQ2 revenue was slightly better than the guidance provided in its April 1 warning, EPS missed estimates thanks to a drop in gross margin to 10% from FQ1's 15.8%.
    • After falling 17% Q/Q in FQ2 amid weak PC sales, hard drive assembly shipments are expected to fall another 10% in FQ3. ASP is expected to be in a $0.58-$0.59 range vs. $0.59 in FQ2, and gross profit  is expected to fall. CEO Rick notes FQ3 got off to "an extremely slow start" as customers responded to lower hard drive demand by "reducing their build plans and their levels of suspension inventory."
    • Customer interest in Hutchison's shape memory alloy (SMA) tech is said to be "encouraging." Penn reiterates Hutchison is still "in the initial stages" of commercializing its smartphone optical image stabilization (OIS) actuator.
    • Shares have tumbled to new 52-week lows.
    • FQ2 results, PR
    | Fri, May 1, 10:05 AM | Comment!
  • Thu, Apr. 30, 5:40 PM
    | Thu, Apr. 30, 5:40 PM | Comment!
  • Thu, Apr. 30, 4:03 PM
    • Hutchinson Technology (NASDAQ:HTCH): FQ2 EPS of -$0.28 misses by $0.03.
    • Revenue of $62.36M (+2.7% Y/Y) beats by $0.42M.
    • Press Release
    | Thu, Apr. 30, 4:03 PM | Comment!
  • Thu, Apr. 9, 6:03 PM
    • As Intel's (NASDAQ:INTC) March 12 warning led many to expect, PC sales were weak in Q1: IDC estimates shipments fell 6.7% Y/Y to 68.5M, a much sharper drop than Q4's 2.4% and Q3/Q2's 1.7%. Gartner estimates shipments fell 5.2% to 71.7M. With IDC also reporting of price pressure, revenue declines might be larger.
    • IDC: [T]he Q1 market faced multiple headwinds – including inventory build-up of Windows Bing based notebooks, commercial slow down following the [Windows] XP refresh and constrained demand in many regions due to currency fluctuations and unfavorable economic indicators."  Gartner thinks sales of  "mobile PCs" (notebooks, convertibles, and Windows tablets) rose, while desktop sales fell sharply. "PC replacements will be driven by thin and light notebooks with tablet functionality."
    • Both Gartner and IDC report U.S. PC shipments fell only ~1% Y/Y. On the other hand, IDC thinks Japan (another high-ASP market) saw shipments fall 44%; strong Q1 2014 spending prior to a tax hike made for tough comps.
    • Market leaders Lenovo (OTCPK:LNVGY) and HP (NYSE:HPQ) continued taking share from firms with less scale: IDC estimates Lenovo's share rose to 19.6% from 17.6% a year ago (3.4% unit growth), and HP's to 19% from 17.1% (3.3% unit growth).
    • #3 Dell's share rose to 13.5% from 13.4%; #4 Asus (OTC:ASUUY) was flat at 7.1%, and #5 Acer (OTC:ASIYF) rose to 7% from 6.3%. Everyone else collectively fell to 33.9% from 38.4%.
    • Unlike in Q4 and Q3 (seasonally stronger quarters for the company), Apple (NASDAQ:AAPL) wasn't in the global top-5. IDC estimates the company's US. unit share rose to 10.9% from 10.6%, good for fourth place (revenue share is higher).
    • Other PC industry names: MSFT, AMD, NVDA, MU, STX, WDC, HTCH
    | Thu, Apr. 9, 6:03 PM | 112 Comments
  • Thu, Apr. 2, 1:01 PM
    • With shares having already fallen nearly 40% from their January highs and expectations of soft PC-related demand widespread, Hutchison (NASDAQ:HTCH) is rallying after pre-announcing below-consensus March quarter sales yesterday afternoon.
    • The hard drive suspension assembly maker currently trades for 0.5x FY14 (ended Sep. '14) sales, after factoring net debt.
    | Thu, Apr. 2, 1:01 PM | Comment!
  • Wed, Apr. 1, 5:15 PM
    • Hutchison (NASDAQ:HTCH) reports preliminary FQ2 (March quarter) revenue of $62M, +2% Y/Y and below a 3-analyst $65.2M consensus. Not surprisingly (in light of Intel's warning), the company blames weak PC demand.
    • Hutchison shipped ~101M hard drive suspension assemblies in FQ2, down slightly from 101.7M a year ago. ASP was $0.59 vs. $0.58 in FQ1 and $0.57 a year ago.
    • CEO Rick Penn: "Cloud and hyperscale applications are expected to provide future growth for suspension assembly demand, but our current demand is still heavily weighted to PC applications ... customer interest in our shape memory alloy (SMA) technology is encouraging ... The smartphone camera market is in the early phases of adopting OIS technology, and as we've stated previously, we are still in the initial stages of developing this new opportunity." An OIS actuator deal for an Android phone made by Taiwan's InFocus was uncovered in January.
    • Shares haven't moved yet AH.
    | Wed, Apr. 1, 5:15 PM | Comment!
  • Mon, Mar. 23, 3:15 PM
    • Today's notable tech gainers include OLED materials/IP provider Universal Display (OLED +5.7%), salvage auction site Liquidity Services (LQDT +6.2%), auto site TrueCar (TRUE +8.5%), touchscreen tech developer Neonode (NEON +10.4%), hard drive assembly supplier Hutchison (HTCH +7.1%), Web site owner/ISP United Online (UNTD +5.5%), software outsourcing firm Luxoft (LXFT +5.6%), optical component vendor NeoPhotonics (NPTN +8.3%), and U.S. solar installer Solar3D (SLTD +15.2%).
    • Many Chinese names are also rallying today. Standouts include online real estate plays SouFun (SFUN +6.9%), E-House (EJ +4%), and Leju (LEJU +8.1%), online beauty product retailer Jumei (JMEI +5.9%), online classifieds platform (WUBA +5%), and app developers/publishers Sungy Mobile (GOMO +4.7%), Cheetah Mobile (CMCM +7.6%), and China Mobile Games (CMGE +5.9%).
    • The list of major decliners is smaller: It includes cloud healthcare software firm Castlight (CSLT -4.8%), microcontroller maker Atmel (ATML -3.1%), supply chain software vendor Manhattan Associates (MANH -4.3%), Chinese solar cell/module maker ReneSola (SOL -5.9%), and RF filter tech developer Resonant (RESN -8.6%).
    • Universal Display is rallying to new 52-week highs yet again amid Galaxy S6 enthusiasm. Solar3D is now up 42% over the last 3 trading days. Heavily-shorted Cheetah Mobile is reversing Friday's post-earnings losses. Castlight is adding to the losses seen on Friday following a neutral Wells Fargo launch.
    • Previously covered: Digital Ally, Sonus, xG Technology, IPG Photonics, CyberArk, Immersion, Nvidia, EZchip
    | Mon, Mar. 23, 3:15 PM | 2 Comments
  • Tue, Mar. 3, 12:39 PM
    • BofA/Merrill's Wamsi Mohan has reinstated coverage on Seagate (STX -5.4%) with an Underperform rating and $50 target, and on Western Digital (WDC -3.3%) with a Neutral rating and $117 target.
    • Mohan is worried Q1 and Q2 hard drive demand (i.e. TAM) is tracking below expectations. With regards to Seagate, he's also worried about its relatively high PC exposure (especially for business PCs), SSD cannibalization risk in both the client and (high-margin) performance hard drive segments, and potential conflicts with OEM customers from Seagate's systems business (stems from the Xyratex acquisition).
    • Though worried about Western's exposure to the same TAM issues as Seagate, Mohan is relatively positive on the company due to its "solid" SSD position (partly the result of acquisitions) and strength in the growing high-capacity enterprise drive segment (boosted by demand from Internet giants).
    • Top hard drive/SSD controller supplier Marvell (MRVL -2.1%) is following Seagate/Western lower, as is hard drive assembly supplier Hutchison (HTCH -1.7%). The Nasdaq is down 0.9%.
    • Marvell's decline comes as the company reveals a Release 10 4G modem at the Mobile World Congress (competes with chips from Qualcomm, Intel, and others), as well as a partnership with Google to support the Web giant's Ara modular phone project.
    • Earlier: Western Digital buys object storage software firm
    | Tue, Mar. 3, 12:39 PM | 2 Comments
  • Wed, Jan. 28, 7:02 AM
    • Hutchinson Technology (NASDAQ:HTCH): FQ1 EPS of -$0.13 beats by $0.01.
    • Revenue of $72.42M (+3.0% Y/Y) beats by $0.52M.
    • Press Release
    | Wed, Jan. 28, 7:02 AM | Comment!
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Company Description
Hutchinson Technology is engaged in the manufacture of suspension assemblies. It supplies critical precision component technologies to the market.
Sector: Technology
Country: United States