Hutchinson Technology (HTCH) Misses Q2 EPS by 3c, Comments on Q3

Hutchinson Technology (NASDAQ: HTCH) reported Q2 EPS of ($0.28), $0.03 worse than the analyst estimate of ($0.25). Revenue for the quarter came in at $62.4 million versus the consensus estimate of $61.94 million.

"The seasonal weakness that we saw in the March quarter has continued into the June quarter, with an extremely slow start to the quarter as customers have reacted to lower disk drive demand by reducing their build plans and their levels of suspension inventory," said Penn. As a result, the company currently expects fiscal 2015 third quarter suspension assembly shipments to be down approximately 10% compared with the second quarter and average selling price to be 58 to 59 cents per part. Due to the lower volume, third quarter gross profit is also expected to decline compared to the second quarter.

"The current weakness in demand is disappointing but consistent with seasonal demand and production in the disk drive industry and, in particular, the weight that personal computing applications still carry in our mix of business," said Penn. "In the second half of the calendar year, we expect higher volume due to increased worldwide suspension assembly demand and an improving position on customers' disk drive programs. We're also encouraged by the level of development activity that is occurring with our customers across all of the disk drive segments. Beyond our core business, our SMA OIS product presents an attractive opportunity to extend our precision manufacturing expertise into a new market."

For earnings history and earnings-related data on Hutchinson Technology (HTCH) click here.

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