BREAKING NEWS: Hutchinson Technology Incorporated (NASDAQ:HTCH), Reports Fourth Quarter Results

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During Monday’s Morning trade, Shares of Hutchinson Technology Incorporated (NASDAQ:HTCH), inclined 102.29% to $3.55. The firm opened its current trade at $3.54. The total volume traded for the day is 181,451.00 shares, as compared to its average daily volume of 150,142.00 shares. The stock is floating in a range of $3.54 $3.59. The stocks hold the market capitalization of $118.68M.

According to news report, Today, Hutchinson Technology Incorporated (HTCH) stated net sales of $63.4 million for its fiscal fourth quarter ended September 27, 2015. Suspension assembly shipments for the quarter totaled 105.4 million, up 22% from 86.6 million in the preceding quarter.

As we predictable, overall demand for suspension assemblies grew in what is typically a seasonally stronger period for disk drive production, said Rick Penn, Hutchinson Technologys president and chief executive officer. Our sales to all of our major disk drive customers raised in the quarter and we also benefited from our market position on suspension assemblies for 2.5-inch disk drives.

Gross profit in the fiscal 2015 fourth quarter totaled $7.5 million, or 11.8% of net sales, up from $4.8 million, or 8.8% of net sales, in the fiscal third quarter. The improvement resulted from the higher volume in the quarter and the resulting improvement in operating leverage. The company continued to optimize costs by shifting assembly production to its Thailand assembly operation, which accounted for 92% of the fourth quarters assembly production, up from 89% in the preceding quarter.

The companys operating loss in the fiscal fourth quarter declined to $3.9 million from $6.1 million in the preceding quarter. The improvement resulted from the improvement in gross profit and lower research and development expenses, which declined to $3.8 million from $5.2 million in the preceding quarter due primarily to the recognition of $1.5 million of formerly deferred income described below. Penn noted that research and development expenses are predictable to return to $5 million to $6 million in the fiscal 2016 first quarter.

Penn said that results from reliability testing for its new shape memory alloy (SMA) optical image stabilization (OIS) actuator have been encouraging. We have shipped prototypes of our Gemini OIS actuator to lensholder assembly manufacturers and presently expect some smartphone makers to start receiving prototype camera modules that use our new OIS actuator by the end of this calendar year.

Short-Term Price Target Update: The mean estimate for the short-term price target for the firm stands at $3.17, according to 3 brokers. The higher price target for HTCH is $4.00, while the lower price target is $2.00. In the past 52-weeks, the company shares have gained 0.28% and marked new high $4.50 on Jan 12, 2015.

For its fiscal 2015 fourth quarter, the company stated a net loss of $9.3 million, or $0.28 per share. The net loss for the quarter comprised:

  • a $2.4 million foreign currency loss;
  • a $1.6 million asset impairment charge on the companys development center building in Hutchinson, Minnesota; and
  • $340,000 of non-cash interest expense, partially offset by
  • $1.5 million of formerly deferred income related to a former cost-sharing agreement for development of the companys SMA OIS actuator.

Not Taking Into Account these items, the companys net loss for the fiscal 2015 fourth quarter was $6.5 million, or $0.20 per share.

For its fiscal 2016 first quarter, the company presently anticipates its suspension assembly shipments to be flat to up 5% sequentially with an average selling price of $0.57, flat with the fiscal 2015 fourth quarter. Gross profit is presently predictable to be flat to up slightly on a sequential basis.

Hutchinson Technology Incorporated researches, designs, develops, manufactures, and supplies suspension assemblies for hard disk drives in Thailand, Hong Kong, the Philippines, Malaysia, the United States, and internationally.


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