Hutchinson Technology plunges on lower Q1 profits
Hutchinson Technology Inc. (Nasdaq: HTCH) shares are spiraling downward after the computer hardware maker posted a first-quarter profit of $2.3 million, or $0.09 per share, down 60% from $5.8 million, or $0.22 per share, a year earlier. The firm said it experienced a drop in sales of disk drive suspension assemblies.
The Hutchinson, Minn.-based firm said it shipped approximately 213 million suspension assemblies during the quarter, down 5% from 225 million in the year-ago quarter. The company said larger purchases by an important customer in the previous quarter hurt first-quarter results. Going forward, CEO Wayne Fortun said industry analysts project that disk drive shipments will rise 12% in 2008, above previous estimates of 10%.
In response to the earnings release, investment bank Brean Murray Carret & Co. lowered its price target on Hutchinson to $18 from $28. In a note to investors, Mark Miller, a Brean Murray analyst, said the “uncertain outlook causes us to avoid these shares.”
Quarterly revenue fell 8% to $173.1 million, from $188.9 million a year earlier. Wall Street analysts expected revenue of $205.8 million.
At today’s close, HTCH was down 33.20%, or $8.04, at $16.18. Over the last 52 weeks, shares have ranged between $16.10 and $27.85.
