Jefferies cuts OmniVision Technologies (OVTI) to hold from buy.
Analyst Adam Benjamin says the company delivered a good quarter, but reported inventory builds and lower guidance. He notes the company cautioned investors of possible issues with OmniPixel potentially leading to share losses as early as the calendar year second-quarter.
He says the company's fourth-quarter fiscal 2005 (ending April) guidance suggests the company will now likely suffer losses in the calendar year first-quarter.
Benjamin cuts his fourth-quarter revenue estimate to $99 million and fiscal 2006 to $420 million from $440 million. He cuts his $1.19 fiscal 2006 earnings per share estimate to $1.10 as a result of lower revenue. He recommends investors stay on the sidelines until the company is able to improve OmniPixel yields and gain back its lost camera phone share.