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AAAND... up 30% today.
:) end of the week.. up 4% and ready to roll on Monday.
my technicals are indicating this will go up this week, unless it breaks down even more.. then ill re-evaluate.
ther are buying a lot of stuff from a nother company here in minnesota
from yahoo
Balance Sheet
Total Cash (mrq): 214.60M
Total Cash Per Share (mrq): 9.187
Total Debt (mrq): 267.00M
Total Debt/Equity (mrq): N/A
Current Ratio (mrq): 2.391
Book Value Per Share (mrq): 13.909
robinhood
there book valus is over 12.00
time to buy
robinhood
5:50PM Hutchinson beats by $0.02, reports revs in-line (HTCH) 8.99 -0.14 : Reports Q1 (Dec) earnings of $0.09 per share, excluding non-recurring items, $0.02 better than the First Call consensus of $0.07; revenues fell 9.6% year/year to $108.2 mln vs the $108.3 mln consensus.
Data Storage Stocks Power Ahead With More Earnings in Store
By the tickerspy.com Staff , On Thursday January 21, 2010, 11:27 am EST
Seagate Technology (NASDAQ: STX - News) topped the Street's EPS expectations with ease, sending shares higher by 10%.
Data storage player Seagate Technology earned $533 million or $1.05 per share in its second fiscal quarter ended January 1. The company topped EPS consensus by 40 cents, also beating on revenues with $3.03 billion. Seagate boasted a 30.5% gross margin in its second fiscal quarter, and CEO Steve Luczo said the company should do better than the previously stated target of 22% to 26% in 2010.
The news is carrying Seagate shares higher by 10% today, and components of the Data Storage Stocks Index are following. The Index is now ahead of the S&P 500 by 4.5% over the last month.
Hutchinson Technology (NASDAQ: HTCH - News), which will report its earnings on Janurary 26, is ahead by 5% today. The company has bested Wall Street's EPS estimates for three straight quarters, though it hasn't posted a quarterly gain since January of 2008.
STEC (NASDAQ: STEC - News) earnings won't come until March 11, but that hasn't stopped traders from having their way with the stock. Today shares are rebounding by 2% after plummeting by -10% in Wednesday's session. STEC is hanging on to a 20% gain over the last month after Broadpoint AmTech gave the stock a $23 price target and Deutsche Bank called the company "a top pick for 2010." More recently, rumors spread that STEC was a possible buyout target of IBM (NYSE: IBM - News), but chalk that up to speculation until any official reports surface.
Elsewhere in the data storage sector, Quantum Corp. (NSYE: QTM) and Western Digital (NYSE: WDC - News) are also showing strength today. Analysts expect the latter to report $1.36 in EPS after the bell.
Meanwhile, 3PAR (NYSE: PAR - News), Xyratex (NASDAQ: XRTX - News), and Compellent Technologies (NYSE: CML - News) are all slipping with the rest of the market for the session. 3PAR is currently one of just three Data Storage Stocks Index components to remain positive over the last week.
Despite what has been for most a week in the red, the Data Storage Stocks Index remains one of the top-100 performing tickerspy Indexes over the last month.
Investors can track the Data Storage Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
http://finance.yahoo.com/q/is?s=htch
Income Statement Get Income Statement for:
View: Annual Data | Quarterly Data All numbers in thousands
PERIOD ENDING 27-Sep-09 28-Jun-09 29-Mar-09 28-Dec-08
Total Revenue 103,242 106,105 79,004 119,671
Cost of Revenue 85,778 104,128 90,778 119,804
Gross Profit 17,464 1,977 (11,774) (133)
Operating Expenses
Research Development 4,716 5,723 7,454 8,883
Selling General and Administrative 10,606 42,510 (4,593) 35,943
Non Recurring (4,390) (3,473) 43,002 32,280
Others - - - -
Total Operating Expenses - - - -
Operating Income or Loss 2,142 (42,783) (57,637) (77,239)
Income from Continuing Operations
Total Other Income/Expenses Net 4,184 3,268 2,721 16,161
Earnings Before Interest And Taxes 10,716 (39,515) (54,916) (61,078)
Interest Expense 2,430 2,819 2,986 2,734
Income Before Tax 8,286 (42,334) (57,902) (63,812)
Income Tax Expense (55) (215) (204) 265
Minority Interest - - - -
Net Income From Continuing Ops 29,955 (42,119) (57,698) (64,077)
Non-recurring Events
Discontinued Operations - - - -
Extraordinary Items - - - -
Effect Of Accounting Changes - - - -
Other Items - - - -
Net Income 8,341 (42,119) (57,698) (64,077)
Preferred Stock And Other Adjustments - - - -
Net Income Applicable To Common Shares $8,341 ($42,119) ($57,698) ($64,077)
Hutchinson Technology stock up after better-than-expected 4Q results
Hutchinson Technology Inc. stock was up about 6 percent Tuesday, a day after the Hutchinson-based maker of hard-disk parts reported better-than-expected results for the fourth quarter.
Hutchinson (Nasdaq: HTCH) reported a profit of $8.3 million, or 34 cents per share, for the quarter ended Sept. 27, versus a loss of $105.5 million, or $4.60 per share, for the same quarter last year.
Excluding one-time gains of $9.4 million from repurchase of debt and the sale of the company’s Souix Falls, S.D., plant, and the company would have had a fourth-quarter loss of $1 million, or 4 cents per share. Analysts polled by Thomson Reuters had expected a loss of 8 cents per share.
Hutchinson stock was up 35 cents per share, or 6 percent, to $6.19 in Tuesday morning trading.
The recession has been especially tough on Hutchinson.
Scotts Valley, Calif.-based Seagate Technology announced earlier this year that it would phase out its procurement of disk drive suspension assemblies from Hutchinson.
Since the end of its 2007 fiscal year in Sept 2007, Hutchinson has cut its workforce by about 47 percent, declining from 4,698 employees worldwide to about 2,500. It closed its Sioux Falls operations and consolidated them into facilities in Eau Claire, Wis., and Hutchinson.
Hutchinson Technology officials say those actions paid off, allowing it to operate at close to break-even as fourth-quarter sales, at $103.2 million, were less than the $164.3 million in sales the company had in the fourth quarter of 2008. The company plans to spend $15 million next year to establish an assembly plant in Thailand.
“We are prepared for the resumption in year-over-year demand growth that we expect, and we are better positioned to weather market and economic instability should it occur,” Wayne Fortun, the company’s president and CEO, said in a news release.
For the full fiscal year, Hutchinson Technology had a loss of $155.5 million, on sales of $408 million, versus a loss of $117.8 million, on sales of $631.6 million, for the previous year.
Hutchinson Technology Inc. F4Q09 (Qtr End 27/09/09) Earnings Call Transcript
http://seekingalpha.com/article/170685-hutchinson-technology-inc-f4q09-qtr-end-27-09-09-earnings-call-transcript?source=yahoo
Hutchinson Technology shares gain
Hutchinson Technology shares gain after upbeat preliminary 4th-quarter results
On Wednesday September 9, 2009, 1:26 pm EDT
Companies:Hutchinson Technology Inc.Seagate Technology
NEW YORK (AP) -- Shares of Hutchinson Technology Inc. soared Wednesday after the company released upbeat preliminary fourth-quarter results.
The Hutchinson, Minn.-based company, which makes disk drive parts, said it expects a close to break-even quarter on sales of $100 million to $107 million.
Hutchinson said it expects to take a $1.9 million gain on a real estate sale as well as the repurchase of company bonds.
Although the company did not give a specific earnings figure, analysts surveyed by Thomson Reuters were expecting a loss of 23 cents per share on sales of $101.2 million. Analysts typically exclude special items.
In a note to investors Wednesday, Craig-Hallum Capital analyst Christian Schwab said the preliminary results indicate "that the worst may be behind the company."
He upgraded shares to "Buy" from "Neutral."
Schwab said market-share loss at one of its customers, Seagate Technology, continues to weigh on Hutchinson, but the company has done a "commendable" job of cutting costs. Hutchinson said late last year that it would trim as much as 25 percent of its work force.
The company's stock jumped 98 cents, or 15 percent, to $7.44 in afternoon trading.
8:54AM Hutchinson sees in-line sales results and net income near break even levels vs the $-9.3 mln consensus, co sees a 1Q10 loss vs the -$6.5 mln consensus (HTCH) 6.03 : Co issues in-line guidance for Q4 (Sep), sees Q4 (Sep) revs of $100-107 mln vs. $100.15 mln First Call consensus. Co also says it sees Q4 net income at near breakeven levels vs the -$9.27 mln consensus. Co sees unit shipments of 140-150 mln suspension assemblies. Through the first nine weeks of its fourth quarter, the co had net sales of approximately $69 mln and had shipped approximately 97 mln suspension assemblies. The fiscal 2009 fourth quarter is benefiting from the full effects of the company's fiscal 2009 restructuring actions. Net income in the fiscal 2009 fourth quarter will also benefit from a $1.9 mln gain on the sale of the company's building in Sioux Falls, South Dakota, and the repurchase of $19.5 mln par value of the company's 2.25% Convertible Subordinated Notes due 2010 for $19.3 mln, including accrued interest. While the co expects improved fourth quarter results, it is likely to incur a net loss in the fiscal 2010 first quarter (consnesus calls for $-6.5 mln net income or ($0.28) per share for 1Q10. The co's fiscal 2010 first quarter results will include a non-cash interest expense of approximately $2.2 mln due to the company's adoption of Financial Accounting Standards Board Staff Position No. APB 14-1.
HTCH with a big move over past week, no upgrades as of yet for the stock since earnings report:
http://www.briefing.com/GeneralContent/Active/Investor/TickerSearch/TickerSearchInvestor.aspx
Hutchinson Technology F3Q09 (Qtr End 6/28/09) Earnings Transcript
http://seekingalpha.com/article/152712-hutchinson-technology-f3q09-qtr-end-6-28-09-earnings-transcript?source=yahoo
Nice move into HTCH earnings release:
Hutchinson Technology, Inc. Earnings Conference Call (Q3 2009)
Scheduled to start Thu, Jul 30, 2009, 5:00 pm Eastern
http://biz.yahoo.com/cc/9/105759.html
This chart is looking interesting.
Data Storage Stocks Surging in June on Earnings, M&A
the tickerspy.com Staff
On Tuesday June 16, 2009, 12:22 pm EDT
Technologies, Inc., Data Domain, Inc.
Data storage stocks surged Tuesday after a memory maker raised its Q2 outlook.
STEC (Nasdaq: STEC - News), which makes flash memory storage products, now expects Q2 EPS to come in between 32-36 cents, excluding items. Its prior forecast had been for EPS of 20-22 cents. The company also bumped its Q2 revenue outlook to $82-84 million from $68-70 million. The firm said strong sales of its ZeusIOPS solid-state drives were behind the improved forecast. The stock is soaring by 30% on the news.
As a whole, the Data Storage Stocks Index is ahead by 5.5%. It is beating the S&P 500 by 26.2% over the last month.
Much of the strength in the Index over the last month has come from the action surrounding the battle to acquire Data Domain (NASDAQ: DDUP - News). In late May, NetApp (NASDAQ: NTAP - News) offered $25 a share for the storage system firm. Storage giant EMC (NYSE: EMC - News) followed up with a $30 per share bid, which was subsequently matched by NetApp. EMC has maintained that its all-cash bid is the superior offer. Over the last month, Data Domain has nearly doubled -- it is now trading above the $30 price that has been offered -- while EMC and NetApp are up 8% and 13%, respectively.
Elsewhere in the sector today, Isilon Systems (Nasdaq: ISLN - News) is up by 4%, and Hutchinson Technology (Nasdaq: HTCH - News), Adaptec (Nasdaq: ADPT - News), Compellent Technologies (NYSE: CML - News), and Seagate Technology (NYSE: STX - News) are all in positive territory as well.
As of this writing, the Data Storage Stocks Index is one of the top-10 performing tickerspy Indexes over the last month, up by 30.6%.
Investors can follow the Data Storage Stocks Index and view related performance charts and metrics at tickerspy.com.
http://blogs.barrons.com/stockstowatchtoday/2009/06/16/more-misery-for-the-refining-story/
Merger News Drives Data Storage Stocks
the tickerspy.com Staff
On Thursday May 21, 2009, 12:55 pm EDT
Technologies, Inc., Data Domain, Inc.
Data storage stocks were mixed on Thursday after a buyout announcement within the sector.
After the bell yesterday, NetApp (NASDAQ: NTAP - News) announced that it is buying Data Domain (NASDAQ: DDUP - News) for $1.5 billion or $25 a share. According to Dow Jones, Brigantine Advisors analyst Mark Kelleher said the companies are "a good match" and noted that further industry consolidation is expected. Buyer NetApp has been mentioned as a possible takeover candidate for Hewlett-Packart (NYSE: HPQ - News). NetApp is up by 4% today while Data Domain shares soar by 35%.
Kelleher also noted that 3Par (NYSE: PAR - News) and Compellent Technologies (NYSE: CML - News) are the next likely takeover candidates. Today, both stocks are up by more than 3%.
As a whole, the Data Storage Stocks Index is ahead by 3.6%. It is beating the S&P 500 by 13.7% over the last month.
Santa Ana, California-based STEC (NASDAQ: STEC - News) is also in positive territory today by 4%.
Adaptec (NASDAQ: ADPT - News) and Hutchinson Technology (NASDAQ: HTCH - News) are among the Index's biggest losers today. Both companies are off by more than -2%.
Sector giant EMC (NYSE: EMC - News) is down slightly. Other popular names are also trading lower including Seagate Technology (NASDAQ: STX - News) and Western Digital (NYSE: WDC - News).
As of this writing, the Data Storage Stocks Index is one of the top-25 performing tickerspy Indexes over the last month, up by 18.7%.
15-May-2009
Other Events
Item 8.01 Other Events.
On May 15, 2009, Hutchinson Technology Incorporated (the "Company") entered into an agreement to sell the Company's real property in Sioux Falls, South Dakota, and certain related personal property for cash consideration of $12,000,000. The sale to Sanford Health, a South Dakota nonprofit corporation, is scheduled to close on or before July 31, 2009, subject to certain contingencies. The Company estimates that the sale will result in a gain of approximately $1,500,000, to be recorded in the fiscal quarter in which the sale closes.
The Company previously announced the closure of its facility in Sioux Falls, South Dakota and the consolidation of operations at the Sioux Falls facility into the Company's facilities in Eau Claire, Wisconsin and Hutchinson, Minnesota.
4:04PM Hutchinson beats by $0.04, reports revs in-line (HTCH) 1.53 -0.10 : Reports Q2 (Mar) loss of $1.48 per share, excluding non-recurring items, $0.04 better than the First Call consensus of ($1.52); revenues fell 45.1% year/year to $79 mln vs the $78.9 mln consensus. The co also announces that it is taking additional actions to reduce costs, improve cash flow, meet the current portion of its debt obligations and make strategic investments as The restructuring actions include eliminating approximately 300 additional positions, bringing overall employment to about 2,500 by the end of the fiscal 2009 third quarter. The company estimates that its financial results for its fiscal 2009 third quarter ending June 28, 2009 will include approximately $25 million of severance and asset impairment charges related to these restructuring.
Seagate Technology, which accounted for 29 percent of Hutchinson Technology's revenue last year, said it will take its business elsewhere.
By STEVE ALEXANDER, Star Tribune
Hutchinson Technology Inc., a company that carved out a piece of Minnesota's high-tech future out on the prairie, is on the ropes. As the skidding economy depressed demand at the end of last year, Hutch Tech cut more than 30 percent of its jobs and said it would close a plant in Sioux Falls, S.D.
If the recession was the left jab, the right cross arrived Friday. Seagate Technology, a customer that accounts for about one-fifth of Hutch Tech's revenue, said it will take its business elsewhere.
That could mean far more drastic cutbacks than the previously announced 1,755 layoffs, said Richard Kugele, an analyst at Needham & Co. in Boston.
"Unfortunately, Hutchinson Technology is going to have to scale back some more, even though they already did," Kugele said. "Now they're going to have to do something pretty dramatic."
Kugele said the defection of Seagate Technology, the world's largest disk-drive manufacturer, took the management of Hutchinson Technology by surprise last week. The loss of a major customer over the next 18 to 24 months could dramatically cut demand for Hutchinson's product, a disk-drive component called a suspension assembly that holds computer chips that read and write data above a spinning magnetic disk, he said.
Kugele has lowered his rating on the company's stock from buy to underperform.
If Hutchinson Technology announces additional cost-cutting, it might inflict more pain on the city of Hutchinson, where 1,300 of the company's 3,100 employees work. The last round of layoffs, in January, included 950 workers at the headquarters plant.
"The Hutchinson Technology layoffs are very significant, and they have a big impact on the community," said Miles Seppelt, the city of Hutchinson's economic development director. "That's why we're working hard to diversify our economy so we won't be in this position in the future."
Hutchinson Technology has eliminated 1,480 jobs since December and has scheduled the elimination of 275 more in Sioux Falls by June. The cutbacks made so far were part of a plan announced in December that would reduce annual costs by $110 million to $125 million.
The company won't disclose additional cost-cutting plans until its second-quarter conference call with analysts on April 28, spokeswoman Connie Pautz said. But the firm announced its $79 million in second-quarter revenue last week; that represented a big drop from the first quarter, when the company lost $64.1 million on revenue of $119.7 million. In calendar year 2008, the company's operating losses totaled more than $100 million.
Hutchinson's stock dropped nearly 40 percent after Friday's announcement. On Monday, the stock closed at $1.75 a share, down 4 cents, or about 2 percent.
Seagate, based in California but with major development operations in the Twin Cities metro area, accounted for 19 percent of Hutchinson Technology's revenue in the first quarter, and 29 percent for all of last year.
Analysts weigh in
Both Hutchinson Technology and Seagate declined to comment on why Seagate walked away, but some analysts think they know.
"Seagate was under heavy pressure to reduce their costs, and they probably got a better bid from a Japanese competitor," said Krishna Chander, an analyst for research firm iSuppli Corp. in Santa Clara, Calif. Japanese companies are more able to cut prices to gain business than American companies are, he said.
"Wall Street punishes U.S. companies for quarterly losses, but the Japanese financial system does not get so agitated," Chander said.
John Rydning, an analyst at research firm IDC in Framingham, Mass., believes Hutchinson has lost Seagate's business to NHK Spring Co., one of its two main Japanese rivals. Hutchinson's traditional strength has been its technology, but that's not as much of an advantage during a recession, when cost cutting is of primary importance, he said. Worldwide, disk drive sales are expected to drop 21 percent this year, to about $25.5 billion.
Analyst Christian Schwab of Craig-Hallum in Minneapolis sees another cause of Seagate's defection: Seagate's "longstanding frustrations" with Hutchinson Technology's unwillingness to move its facilities to Asia, where most disk drives are manufactured. He lowered his rating on Hutchinson's stock Monday from buy to neutral.
Hutchinson Technology declined to comment on Schwab's assertion.
Pautz said the company previously had planned to move a portion of its product manufacturing to Thailand, but that project was put on hold last fall.
Whatever the reason for Seagate's decision to stop doing business with Hutchinson Technology, it can't be blamed on the economy, Kugele said.
"It has to do with the competitive environment and Seagate's procurement methods," Kugele said.
But today's crisis might not be long-lived.
"I don't think Hutchinson Technology is in deep trouble," Rydning said. "If a competitor can't meet Seagate's requirements, Seagate will very quickly be talking to Hutchinson again."
Steve Alexander • 612-673-4553
Hutchinson Technology has eliminated 1,480 jobs since December and has scheduled the elimination of 275 more in Sioux Falls by June. The cutbacks made so far were part of a plan announced in December that would reduce annual costs by $110 million to $125 million.
The company won't disclose additional cost-cutting plans until its second-quarter conference call with analysts on April 28, spokeswoman Connie Pautz said. But the firm announced its $79 million in second-quarter revenue last week; that represented a big drop from the first quarter, when the company lost $64.1 million on revenue of $119.7 million. In calendar year 2008, the company's operating losses totaled more than $100 million.
Hutchinson's stock dropped nearly 40 percent after Friday's announcement. On Monday, the stock closed at $1.75 a share, down 4 cents, or about 2 percent.
Seagate, based in California but with major development operations in the Twin Cities metro area, accounted for 19 percent of Hutchinson Technology's revenue in the first quarter, and 29 percent for all of last year.
Analysts weigh in
Both Hutchinson Technology and Seagate declined to comment on why Seagate walked away, but some analysts think they know.
"Seagate was under heavy pressure to reduce their costs, and they probably got a better bid from a Japanese competitor," said Krishna Chander, an analyst for research firm iSuppli Corp. in Santa Clara, Calif. Japanese companies are more able to cut prices to gain business than American companies are, he said.
"Wall Street punishes U.S. companies for quarterly losses, but the Japanese financial system does not get so agitated," Chander said.
John Rydning, an analyst at research firm IDC in Framingham, Mass., believes Hutchinson has lost Seagate's business to NHK Spring Co., one of its two main Japanese rivals. Hutchinson's traditional strength has been its technology, but that's not as much of an advantage during a recession, when cost cutting is of primary importance, he said. Worldwide, disk drive sales are expected to drop 21 percent this year, to about $25.5 billion.
Analyst Christian Schwab of Craig-Hallum in Minneapolis sees another cause of Seagate's defection: Seagate's "longstanding frustrations" with Hutchinson Technology's unwillingness to move its facilities to Asia, where most disk drives are manufactured. He lowered his rating on Hutchinson's stock Monday from buy to neutral.
Hutchinson Technology declined to comment on Schwab's assertion.
Pautz said the company previously had planned to move a portion of its product manufacturing to Thailand, but that project was put on hold last fall.
Whatever the reason for Seagate's decision to stop doing business with Hutchinson Technology, it can't be blamed on the economy, Kugele said.
"It has to do with the competitive environment and Seagate's procurement methods," Kugele said.
But today's crisis might not be long-lived.
"I don't think Hutchinson Technology is in deep trouble," Rydning said. "If a competitor can't meet Seagate's requirements, Seagate will very quickly be talking to Hutchinson again."
Steve Alexander • 612-673-4553
Hutchinson Technology has eliminated 1,480 jobs since December and has scheduled the elimination of 275 more in Sioux Falls by June. The cutbacks made so far were part of a plan announced in December that would reduce annual costs by $110 million to $125 million.
The company won't disclose additional cost-cutting plans until its second-quarter conference call with analysts on April 28, spokeswoman Connie Pautz said. But the firm announced its $79 million in second-quarter revenue last week; that represented a big drop from the first quarter, when the company lost $64.1 million on revenue of $119.7 million. In calendar year 2008, the company's operating losses totaled more than $100 million.
Hutchinson's stock dropped nearly 40 percent after Friday's announcement. On Monday, the stock closed at $1.75 a share, down 4 cents, or about 2 percent.
Seagate, based in California but with major development operations in the Twin Cities metro area, accounted for 19 percent of Hutchinson Technology's revenue in the first quarter, and 29 percent for all of last year.
Analysts weigh in
Both Hutchinson Technology and Seagate declined to comment on why Seagate walked away, but some analysts think they know.
"Seagate was under heavy pressure to reduce their costs, and they probably got a better bid from a Japanese competitor," said Krishna Chander, an analyst for research firm iSuppli Corp. in Santa Clara, Calif. Japanese companies are more able to cut prices to gain business than American companies are, he said.
"Wall Street punishes U.S. companies for quarterly losses, but the Japanese financial system does not get so agitated," Chander said.
John Rydning, an analyst at research firm IDC in Framingham, Mass., believes Hutchinson has lost Seagate's business to NHK Spring Co., one of its two main Japanese rivals. Hutchinson's traditional strength has been its technology, but that's not as much of an advantage during a recession, when cost cutting is of primary importance, he said. Worldwide, disk drive sales are expected to drop 21 percent this year, to about $25.5 billion.
Analyst Christian Schwab of Craig-Hallum in Minneapolis sees another cause of Seagate's defection: Seagate's "longstanding frustrations" with Hutchinson Technology's unwillingness to move its facilities to Asia, where most disk drives are manufactured. He lowered his rating on Hutchinson's stock Monday from buy to neutral.
Hutchinson Technology declined to comment on Schwab's assertion.
Pautz said the company previously had planned to move a portion of its product manufacturing to Thailand, but that project was put on hold last fall.
Whatever the reason for Seagate's decision to stop doing business with Hutchinson Technology, it can't be blamed on the economy, Kugele said.
"It has to do with the competitive environment and Seagate's procurement methods," Kugele said.
But today's crisis might not be long-lived.
"I don't think Hutchinson Technology is in deep trouble," Rydning said. "If a competitor can't meet Seagate's requirements, Seagate will very quickly be talking to Hutchinson again."
Steve Alexander • 612-673-4553
Hutchinson Technology has eliminated 1,480 jobs since December and has scheduled the elimination of 275 more in Sioux Falls by June. The cutbacks made so far were part of a plan announced in December that would reduce annual costs by $110 million to $125 million.
The company won't disclose additional cost-cutting plans until its second-quarter conference call with analysts on April 28, spokeswoman Connie Pautz said. But the firm announced its $79 million in second-quarter revenue last week; that represented a big drop from the first quarter, when the company lost $64.1 million on revenue of $119.7 million. In calendar year 2008, the company's operating losses totaled more than $100 million.
Hutchinson's stock dropped nearly 40 percent after Friday's announcement. On Monday, the stock closed at $1.75 a share, down 4 cents, or about 2 percent.
Seagate, based in California but with major development operations in the Twin Cities metro area, accounted for 19 percent of Hutchinson Technology's revenue in the first quarter, and 29 percent for all of last year.
Analysts weigh in
Both Hutchinson Technology and Seagate declined to comment on why Seagate walked away, but some analysts think they know.
"Seagate was under heavy pressure to reduce their costs, and they probably got a better bid from a Japanese competitor," said Krishna Chander, an analyst for research firm iSuppli Corp. in Santa Clara, Calif. Japanese companies are more able to cut prices to gain business than American companies are, he said.
"Wall Street punishes U.S. companies for quarterly losses, but the Japanese financial system does not get so agitated," Chander said.
John Rydning, an analyst at research firm IDC in Framingham, Mass., believes Hutchinson has lost Seagate's business to NHK Spring Co., one of its two main Japanese rivals. Hutchinson's traditional strength has been its technology, but that's not as much of an advantage during a recession, when cost cutting is of primary importance, he said. Worldwide, disk drive sales are expected to drop 21 percent this year, to about $25.5 billion.
Analyst Christian Schwab of Craig-Hallum in Minneapolis sees another cause of Seagate's defection: Seagate's "longstanding frustrations" with Hutchinson Technology's unwillingness to move its facilities to Asia, where most disk drives are manufactured. He lowered his rating on Hutchinson's stock Monday from buy to neutral.
Hutchinson Technology declined to comment on Schwab's assertion.
Pautz said the company previously had planned to move a portion of its product manufacturing to Thailand, but that project was put on hold last fall.
Whatever the reason for Seagate's decision to stop doing business with Hutchinson Technology, it can't be blamed on the economy, Kugele said.
"It has to do with the competitive environment and Seagate's procurement methods," Kugele said.
But today's crisis might not be long-lived.
"I don't think Hutchinson Technology is in deep trouble," Rydning said. "If a competitor can't meet Seagate's requirements, Seagate will very quickly be talking to Hutchinson again."
Steve Alexander • 612-673-4553
Hutchinson Technology has eliminated 1,480 jobs since December and has scheduled the elimination of 275 more in Sioux Falls by June. The cutbacks made so far were part of a plan announced in December that would reduce annual costs by $110 million to $125 million.
The company won't disclose additional cost-cutting plans until its second-quarter conference call with analysts on April 28, spokeswoman Connie Pautz said. But the firm announced its $79 million in second-quarter revenue last week; that represented a big drop from the first quarter, when the company lost $64.1 million on revenue of $119.7 million. In calendar year 2008, the company's operating losses totaled more than $100 million.
Hutchinson's stock dropped nearly 40 percent after Friday's announcement. On Monday, the stock closed at $1.75 a share, down 4 cents, or about 2 percent.
Seagate, based in California but with major development operations in the Twin Cities metro area, accounted for 19 percent of Hutchinson Technology's revenue in the first quarter, and 29 percent for all of last year.
Analysts weigh in
Both Hutchinson Technology and Seagate declined to comment on why Seagate walked away, but some analysts think they know.
"Seagate was under heavy pressure to reduce their costs, and they probably got a better bid from a Japanese competitor," said Krishna Chander, an analyst for research firm iSuppli Corp. in Santa Clara, Calif. Japanese companies are more able to cut prices to gain business than American companies are, he said.
"Wall Street punishes U.S. companies for quarterly losses, but the Japanese financial system does not get so agitated," Chander said.
John Rydning, an analyst at research firm IDC in Framingham, Mass., believes Hutchinson has lost Seagate's business to NHK Spring Co., one of its two main Japanese rivals. Hutchinson's traditional strength has been its technology, but that's not as much of an advantage during a recession, when cost cutting is of primary importance, he said. Worldwide, disk drive sales are expected to drop 21 percent this year, to about $25.5 billion.
Analyst Christian Schwab of Craig-Hallum in Minneapolis sees another cause of Seagate's defection: Seagate's "longstanding frustrations" with Hutchinson Technology's unwillingness to move its facilities to Asia, where most disk drives are manufactured. He lowered his rating on Hutchinson's stock Monday from buy to neutral.
Hutchinson Technology declined to comment on Schwab's assertion.
Pautz said the company previously had planned to move a portion of its product manufacturing to Thailand, but that project was put on hold last fall.
Whatever the reason for Seagate's decision to stop doing business with Hutchinson Technology, it can't be blamed on the economy, Kugele said.
"It has to do with the competitive environment and Seagate's procurement methods," Kugele said.
But today's crisis might not be long-lived.
"I don't think Hutchinson Technology is in deep trouble," Rydning said. "If a competitor can't meet Seagate's requirements, Seagate will very quickly be talking to Hutchinson again."
Steve Alexander • 612-673-4553
http://www.startribune.com/business/42558972.html?page=2&c=y
Great article in yesterdays Mpls Tribune about HTCH. A long article about their viability, products and so on. The analysts clearly stated that they would not only make it thru this, but Seagate would probably come back due to the Japanese having an inferior product. I thought that was interesting. The stock seems to have bottomed at $1.60.
Hutchinson Technology Inc. shares plunged 40 percent Friday morning after the company warned of disappointing second-quarter sales and announced that Seagate Technology plans to phase out its business with the firm.
Scotts Valley, Calif.-based Seagate, which has manufacturing and development operations in Shakopee, will phase out its procurement of suspension assemblies from Hutchinson Technology over the next 18 to 24 months. In the quarter ended March 29, Seagate represented 19 percent of Hutchinson Technology’s business.
Meanwhile, Hutchinson Technology said it reported net sales of approximately $79 million during its fiscal second quarter. Analysts surveyed by Thomson Reuters were projecting revenue of $101.5 million for the quarter, and the company posted revenue of $143.8 million in the second quarter of 2008.
Hutchinson Technology shipped approximately 107 million suspension assemblies during its fiscal second quarter, down 31 percent from roughly 155 million in the same period last year.
The Hutchinson, Minn.-based company’s average selling price declined to 71 cents from 76 cents primarily due to a shift in product mix, as well as aggressive pricing conditions in the market.
The company will report its full second-quarter results on April 28.
Hutchinson Technology (Nasdaq: HTCH) shares plunged $1.19, or 40.5 percent, to $1.76 per share in morning trading.
Buying into HTCH today, like the large cash position, small float and huge short position(nearly 20%)
Stock price as of 4/4/09 was $1.79. 10Q and conference call will be April 28th
The previous amount stated was net income. 95% of all shares are held my Mutual Funds, a very small float out there.
The loss of Seagate is about 19% of their business. They did 77 million last quarter.
This stock has dropped to historic lows and is actually a pretty good buy, though a bit of a risk.
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http://www.htch.com/
http://finance.yahoo.com/q/ks?s=HTCH
Hutchinson Technology Incorporated engages in the design, development, manufacture, and marketing of suspension assemblies for disk drives primarily in Thailand, Hong Kong, Japan, the United States, and the People's Republic of China. The company operates in two divisions, Disk Drive Components and BioMeasurement. The Disk Drive Components division manufactures suspension assemblies for various sizes and types of hard disk drives, as well as provides etched and stamped components used in connection with, or related to, suspension assemblies. This division’s products are primarily used as components of disk drives that hold the read/write heads in position above the spinning magnetic disks. It sells its suspension assemblies to original equipment manufacturers and to subassemblers. The BioMeasurement division provides the InSpectra StO2 System for use in the trauma, emergency medicine, and critical care settings to directly monitor the compromised tissue perfusion associated with hemorrhagic and other forms of shock. This device provides a measure of local tissue oxygen saturation, which quantifies the ratio of oxygenated hemoglobin to total hemoglobin in the microcirculation of skeletal or peripheral muscle. Hutchinson Technology was founded in 1965 and is headquartered in Hutchinson, Minnesota.
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