Hutchinson blames intense competition for Q1 loss
Hutchinson Technology Inc.’s (Nasdaq: HTCH) stock fell on exceptionally heavy volume in after-hours trading today after the firm reported a net loss of $3.6 million, or $0.14 per share, on revenue of $170.7 million for its fiscal second quarter ended March 25.
Ten analysts polled by Thomson First Call were expecting, on average, earnings per share of $0.09 on revenue of $184 million.
The results compared with a net income of $8.3 million, or $0.29 per diluted share, on net sales of $186.4 million in the 2006 fiscal second quarter.
Hutchinson’s shares dropped $1.60, or 7.2%, to $20.51 in after-hours trading. The stock has traded between $17.30 (on July 21, 2006) and $25.40 (on May 10, 2006) in the past year. Volume was heavy – at 1.1 million shares, compared with a three-month daily average of about 445,000 shares.
The Hutchinson, Minn.-based supplier of suspension assemblies for disk drives cited market conditions and “very intense” competition as being partly behind the results. Hutchinson President and CEO Wayne M. Fortun said that suspension assembly pricing is becoming more competitive.
During the quarter, the company shipped approximately 205 million suspension assemblies, down 9% from the preceding quarter and flat with the fiscal 2006 second quarter. Fortun attributed the sequential quarter decline in volume primarily to weaker demand for suspension assemblies used in 3.5-inch ATA disk drives.
