OCZ Technology slumps on fiscal 1Q results
NEW YORK (AP) — Shares of OCZ Technology Group Inc. tumbled Wednesday after the flash memory provider reported disappointing results in its fiscal first quarter, partly because of supply chain problems.
THE SPARK: OCZ said Tuesday that it lost $6.3 million, or 9 cents per share, over the three months ended May 31, narrower than its loss of 9.1 million, or 20 cents per share, a year ago.
Excluding one-time items, OCZ said lost 17 cents per share in the most recent quarter. Analysts were forecasting a smaller loss of 12 cents per share, according to FactSet.
Revenue jumped 54 percent to $113.6 million. Analysts predicted $115.7 million in revenue.
THE BIG PICTURE: OCZ had expected revenue of $110 million to $130 million for the quarter, and the final result was near the low end of its estimate. The San Jose, Calif., company said supply chain problems drove up its costs during the quarter and hurt its sales of power regulators. It said it has resolved those problems.
LOOKING AHEAD: OCZ expects to report revenue of $130 million to $140 million for the fiscal second quarter, which ends Aug. 31, bracketing analysts' expectations. It maintained an annual forecast of $630 million to $700 million in revenue.
THE ANALYSIS: Benchmark Capital analyst Gary Mobley said the company had expected to be profitable, when stripping out one-time charges, by this point.
He said OCZ has done a good job in keeping its expenses down and its products are strong, but it needs to resolve some of its recent operating problems. He maintained a "Hold" rating on the stock.
SHARE ACTION: OCZ Technology shares lost 89 cents, or 16 percent, to $4.56 in afternoon trading. The stock has lost about 30 percent of its value this year.