Thu, Feb. 12, 4:06 PM
Wed, Feb. 11, 5:35 PM
Nov. 7, 2014, 4:57 PM
- Initially lower after posting mixed Q3 results and once more providing a downbeat outlook, Rubicon (NASDAQ:RBCN) finished the day up 9.6%.
- The sapphire wafer vendor notes industry oversupply led pricing for 2" core wafers to fall 30% Q/Q in Q3. It's seeing "increasing interest in two-inch material" in Q4, but also declares 4" demand to be "very weak" due to above-normal LED backlighting market seasonality.
- Q4 revenue is expected to be "similar" to a Q3 level of $8M; that puts it below an $11.5M consensus. EPS is expected to be in a range of -$0.38 to -$0.42, below a -$0.35 consensus. Rubicon expects revenue to rise in Q1 2015, aided by improving 4" wafer demand.
- A $9.5M gross loss was seen in Q3 on $8M in revenue. GAAP opex rose 34% Y/Y to $4.4M.
- Rubicon ended Q3 with $53M in cash/investments (compares with a $115M market cap), and no debt.
- Q3 results, PR
Nov. 6, 2014, 4:08 PM
Oct. 22, 2014, 2:50 PM
- Canaccord and D.A. Davidson have downgraded Cree (CREE -16.7%) to neutral ratings after the company offered a weaker-than-expected FQ2 outlook and reported a 580 bps Q/Q gross margin drop.
- Canaccord's Jonathan Dorsheimer, who wasn't quite enthusiastic about reiterating a Buy following Cree's Oct. 2 FQ1 warning: "In spite of the fact that we may be...marking the bottom for CREE shares, we simply fail to see a potentially positive catalyst ... Our thesis was based around the transition from captive to merchant sales in Cree’s components [business], which at best has been pushed by 6-9 months now."
- He adds Canaccord's research confirms Cree has lost LED component share to Philips' Lumileds unit, and that a shift towards mid-power LED sales in China is also taking a toll.
- Cowen's Jeffrey Osborne (Market Perform) thinks margins will stabilize as Cree cuts factory output, continues seeing healthy lighting and power/RF growth, and gets a lighting margin boost from a mix shift to non-bulb lighting products. He's still cautious on account of Cree's near-term LED component challenges, but expects the company's technology strengths will help its cause long-term.
- Fellow LED industry names Rubicon (RBCN -2.3%), Veeco (VECO -3.7%), and Aixtron (AIXG -2.5%) are also lower.
Aug. 7, 2014, 5:19 PM
- Though Rubicon (NASDAQ:RBCN) beat Q2 estimates, it's guiding for Q3 revenue of $8M-$12M and EPS of -$0.39 to -$0.44, far below a consensus of $16.3M and -$0.27.
- The company says it's seeing "very little demand" in Q3 for 2" core sapphire wafers due to excess inventory among polishing clients. It also thinks "recent capacity additions in the sapphire market" related to mobile devices are "temporarily impacting" 2" demand. That's almost certainly a reference to GT Advanced (NASDAQ:GTAT) and its huge sapphire production efforts for Apple.
- 2" demand is expected to improve in Q4. Rubicon also says it's upbeat about initial qualification of its PSS wafers at 3 new clients.
- Q2 gross margin was -50.2% (a $7.3M gross loss on revenue of $14.5M). Rubicon notes 4" core wafer pricing rose 10% Q/Q amid strong LED market demand, but added "idle plant and development costs at our wafering facility continued to be a drag on earnings."
- Q2 results, PR
Aug. 7, 2014, 4:29 PM
May. 1, 2014, 4:51 PM
- Due to weak margins caused by idle plant and development costs at its wafering facility, Rubicon (RBCN) expects Q2 EPS of -$0.38 to -$0.46, well below a -$0.20 consensus. Revenue is expected to be "similar" to a Q1 level of $14.3M; the consensus is at $15.2M.
- Rubicon took a $1.1M sapphire wafer inventory charge in Q1, and says wafer costs were "higher than normal due to the large number of [patented sapphire substrate] samples produced and the cost of establishing a four-inch polishing line."
- The company had a Q1 gross loss of $7.5M (up from $3.4M a year ago) on revenue of $14.3M. Opex rose 17% Y/Y to $3.4M (compares with 72% rev. growth).
- Wafer costs are expected to come down in 2H14 as Rubicon shifts from development to production. Wafer revenue is expected to be "meaningfully higher" in Q2, but core revenue is expected to fall due to the exhaustion of sapphire boule inventory.
- Shares also tumbled three months ago due to margin/pricing worries.
- Q1 results, PR
May. 1, 2014, 4:26 PM
Apr. 29, 2014, 2:43 PM
- Though Aixtron (AIXG +2.3%) missed Q1 estimates, it reiterated guidance for 2014 revenue to be flat Y/Y. Earnings are expected to improve from 2013 levels, but an EBIT loss is still forecast.
- In addition, the LED equipment maker's orders 2% Q/Q and 26% Y/Y in Q1 to €37.7M. Quarter-ending backlog was €64.2M, -18% Y/Y but +8% Q/Q.
- Gross margin was 25% - down from seasonally strong Q4's 34%, but much better than the year-ago period's -119% (no typo).
- The company notes capacity utilization among LED customers "remains at relatively high levels" amid growing demand, and thinks "sentiment among customers is improving as the growth in the LED market drives the customers' profitability." At the same time, it observes "there was still no noticeable increase in investments in LED manufacturing capacity expansions" in Q1.
- Rival Veeco (VECO +2.5%) and LED wafer vendor Rubicon (RBCN +1.2%) are higher on a good day for tech. Rubicon reports on Thursday, and Veeco on May 5.
- Q1 results, PR
Feb. 19, 2014, 5:01 PM
- Rubicon (RBCN) expects Q1 revenue of $13M, slightly below a $13.5M consensus. More importantly, the company says the recent improvement in (long-depressed) sapphire wafer prices has "temporarily slowed" due to LED backlighting seasonality, and that prices for 2" and 4" wafers are expected to be flat Q/Q.
- In addition, Rubicon states development costs for new wafer orders will "reduce margins in the near-term," though lower idle plant costs should offset much of the impact.
- The company expects its Q1 op. loss to be similar to Q4 levels. With Q4 EPS having come in at -$0.22, that suggests Q1 EPS will be below a -$0.14 consensus. At the same time, Rubicon expects pricing to improve later in 2014, and for wafer orders to accelerate.
- Rubicon had a Q4 gross loss of $5.8M vs. a $912K gross profit in the year-ago period. While revenue fell 43% Y/Y to $11.5M, opex rose 5% to $3.2M.
- Q4 results, PR
Feb. 19, 2014, 4:04 PM
Feb. 19, 2014, 12:10 AM| 5 Comments
Feb. 18, 2014, 5:35 PM| Comment!
Jan. 22, 2014, 2:35 PM
- Though its FQ3 guidance is only in-line, investors are giving a resounding thumbs-up to Cree's (CREE +7.7%) FQ2 report, given it featured solid revenue and earnings beats on the back of strong LED lighting growth, and signs the margin pressure lately faced by the company could be softening.
- LED wafer supplier Rubicon (RBCN +5%) is also up sharply, as are equipment vendors Veeco (VECO +6.5%) and Aixtron (AIXG +4.6%).
- Cree's lighting product sales rose 42% Y/Y in FQ2 (a pickup from FQ1's 37% growth), and now make up 42% of the company's revenue (up from 38% in FQ2). Just as importantly, Cree's lighting gross margin, hurt lately by aggressive pricing for consumer LED bulbs at Home Depot and elsewhere, rose 100 bps Q/Q to 27.9% (albeit while falling 580 bps Y/Y).
- LED product sales (components) rose 7% Y/Y after growing 16% in FQ1, and now make up 52% of revenue (down from 56%). Gross margin was 45.4%, -120 bps Q/Q but +350 bps Y/Y. Power/RF product sales rose 17% Y/Y, and carried a 58% gross margin (+430 bps Q/Q and +140 bps Y/Y).
- Goldman (Buy) thinks Cree's numbers demonstrate LED lighting adoption is "in the early innings," and believes its guidance "implies a return to 30%+ gross margin in lighting after several disappointing quarters." The firm is also pleased sell-through at Home Depot doubled Q/Q, and considers Cree well-positioned for "a potentially break-out June."
- Needham (Hold) is more cautious. It's worried a mix shift towards bulbs will keep margins pressured, notes capacity constraints are limiting sales of high-margin LED components, and considers Cree "fairly valued" at 29x 2015E EPS.
- CC transcript
Nov. 5, 2013, 11:03 AM
- GT Advanced (GTAT +23.4%) has caught four upgrades and soared to new 52-week highs after striking a huge sapphire supply deal Apple. Rubicon (RBCN +25.3%) is also flying higher. Corning (GLW -2.9%), meanwhile, is heading in the opposite direction as investors worry Apple (and perhaps also peers) will begin using sapphire instead of Gorilla Glass to cover smartphone/tablet displays.
- The deal still has some skeptics; they point to the fact GT's sapphire materials sales to Apple are expected carry much lower gross margins than its traditional equipment sales, that Apple isn't providing any purchase commitments, and that exclusivity requirements stand to limit GT's sales to other mobile OEMs. But by and large, optimism about the opening of a major new market opportunity long targeted by GT is overshadowing these concerns.
- Cantor is defending Corning, arguing sapphire will more likely be used in small form-factor Apple devices (an iWatch?) than in iPhone/iPad displays. Sterne Agee estimates Apple accounts for 10%-15% of Corning's phone-related sales.
- GT's management refrained from providing additional details about Apple on the CC (transcript); Apple tends to demand heavy secrecy from suppliers. But they did strike an optimistic tone about sapphire pricing and furnace utilization rates among traditional clients, and predicted customers will likely " start taking delivery of backlog at a faster pace, as [GT's] capacity opens up again." GT also claimed to be making good progress in commercializing its Hyperion tech (set for a 2015 launch) for solar applications;
- On the other hand, GT doesn't think the solar equipment market will "show significant opportunity" before 2015.
RBCN vs. ETF Alternatives
Rubicon Technology, Inc., is an electronic materials provider that develops, manufactures and sells monocrystalline sapphire and other innovative crystalline products for LEDs, RFICs, blue laser diodes, optoelectronics and other optical applications.
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