Yesterday, 12:46 PM
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, 12:46 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.
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
Thu, Apr. 30, 5:40 PM
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.
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
Mon, Jan. 26, 10:00 AM
- In addition to slightly missing FQ2 revenue estimates (while posting in-line EPS), Seagate (NASDAQ:STX) has guided on its CC for FQ3 revenue of "at least $3.45 billion," unfavorable to a $3.59B consensus.
- FQ2 gross margin was 28.2%, +10 bps Q/Q but -40 bps Y/Y, and below (per Needham) a consensus of 28.6%. Seagate forecasts an FQ3 GM of 28.5%.
- Seagate estimates the addressable market (TAM) for hard drives was 144M-145M in FQ2, down from 147M in FQ1 and up from 142M a year earlier. The company pegs its share at 40%. Hard drive ASP fell by $1 Y/Y to $61.
- Two weak spots in FQ2: Consumer electronics hard drive shipments fell 9% to 6.1M, and branded drive shipments (high-margin) fell 3% to 6M. PC drive shipments rose 4% Y/Y to 36.6M, with notebook growth offsetting a desktop decline, and enterprise shipments (high-margin) rose 17% to 9.1M.
- $18M was spent on buybacks. Not counting a $620M gain recorded for an arbitration award, opex rose 6% Y/Y.
- Archrival Western Digital (WDC -7.2%) and hard drive assembly supplier Hutchison (HTCH -4.5%) are following Seagate lower. Western reports tomorrow afternoon, and Hutchison on Wednesday morning.
- Seagate's FQ2 results, PR, earnings slides (.pdf)
Mon, Jan. 12, 11:30 AM
- Hutchison (NASDAQ:HTCH) is supplying an optical image stabilization (OIS) actuator for the camera module found within Taiwanese OEM InFocus' M530 Android phone. The phone is being sold in both China and international markets. (h/t Plan Maestro)
- Hutchison, which receives the lion's share of its revenue from hard drive assemblies, mentioned during its Nov. 5 FQ4 CC (transcript) it had begun ramping OIS actuator production, and is "delivering OIS actuators for a smartphone that will be introduced in China by the end of ."
- The company asserts its shape memory alloy (NYSE:SMA) actuator tech "offers performance and size advantages compared with current OIS solutions."
Oct. 24, 2014, 5:37 PM
Sep. 24, 2014, 5:35 PM
Aug. 4, 2014, 12:47 PM
Aug. 1, 2014, 2:35 PM
- Though Hutchinson (NASDAQ:HTCH) slightly missed FQ3 revenue estimates, it's guiding for hard drive suspension assembly shipments to rise to 110M-115M in FQ4 from FQ3's 97.5M. With ASPs expected to be "relatively flat," that suggests revenue will beat a consensus for 10.5% Q/Q growth.
- FQ3 ASP rose $0.01 Q/Q to $0.58. Shipments of relatively costly dual-stage actuated (DSA) suspensions made up 25% of shipments vs. 24% in FQ2, and are expected to make up 25%-30% of FQ4 shipments.
- Gross margin was 6%, down from 10% in FQ2 but up from 2.3% a year ago. Hutchinson declares it's confident it has "the industry's lowest cost model for producing suspension assemblies."
- FQ3 results, PR
Aug. 1, 2014, 12:46 PM
May 27, 2014, 2:10 PM
- A "material ramp" in high-margin enterprise drive shipments in 2H14 could provide $0.30/share in upside to Seagate (STX +2.6%) EPS estimates, writes RBC's Amit Dayanani.
- Daryanani thinks enterprise drives carry a 40%+ gross margin, well above a company-wide FQ3 GM of 28.5%. He believes Seagate can deliver $7+ in FY16 (ends June '16) EPS, aided by cost controls, buybacks, and a 30% GM.
- Seagate's enterprise drive sales rose 200K Y/Y in FQ3 to 7.7M. They've been pressured by weak enterprise server/storage demand, but have also received a lift from strong demand from Web/cloud clients. The latter customer base often prefers higher-density/lower-margin enterprise drives.
- Western Digital (WDC +2.6%) is once more heading in the same direction as Seagate, as is assembly supplier Hutchison (HTCH +2.9%).
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