STEC pummelled! Latest
17:41 STEC STEC Inc: Conference call summary (23.15 +1.59) -Update-
On the earnings conference call, STEC said that it found out from EMC about a week ago that it had a supply of inventory, and then devised a "marketing incentive program" to help pull the inventory through. STEC says that it won't know until mid-late December the impact that this will have because EMC hasn't provided the exact numbers in regards to the oversupply for inventory. However, STEC believes that its gross margin should stay above 50%. Mgmt said that the incentive program will be a "great way to promote SSDs" and could be a significant driver for revenue. Co says that this agreement could be renewed with EMC, but there is no reason to sign a commitment now. It will have to see what the situation is after Q4 first, but says that the agreement applies to every STEC product that EMC sells. Co is hoping that EMC's inventory levels return to normalized levels in Q1. STEC says that IBM sales have dropped off as that company has had trouble marketing SSD systems, and says that the incentive program may help with that. On competition, mgmt says that there are not any competitors right now, and doesn't expect any until early-to-mid 2011. In terms of its suppliers, STEC says that right now is not a good time to renegotiate prices for NAND as prices are high, but the end of December may be a better time to do that. Its NAND suppliers have not asked for a price increase at this point... STEC is trading at 15.63 in after-hours.