Hutchinson Technology stock, which dropped 16 percent Tuesday in anticipation of the firm's first-quarter earnings report, rose more than 2 percent in after-hours trading when the loss proved to be far lower than Wall Street had been expecting.
The Hutchinson, Minn., maker of disk-drive components lost $6.5 million, or 27 cents a share, in the first quarter. But excluding $1 million in severance costs and $1 million in noncash interest expense, the adjusted loss was $4.5 million, or 19 cents a share. Analysts had been expecting an adjusted loss of 49 cents.
First-quarter revenue was $63.7 million, slightly less than the $64.4 million analysts had expected.
The first-quarter results were released after the market closed. The company's stock, which had closed Tuesday at $2.29, down 44 cents or 16.1 percent, rose 5 cents, or 2.2 percent, to $2.34 in after-hours trading.
Analysts who follow Hutchinson Technology could not be reached Tuesday.
Hutchinson Technology has been struggling for more than three years as a result of a downturn in its business that began in late 2008 as the global economic crisis hit. That was followed in 2011 by floods in Thailand that closed a large portion of its manufacturing space there. Widespread layoffs followed.
Much of its current troubles are related to a worldwide slowdown in the market for computer disk drives. Hutchinson makes critical disk-drive components called "suspension assemblies" that hold reading and writing chips above rapidly spinning magnetic disks.
In July, Hutchinson posted a wider-than-expected third-quarter loss that sent its stock tumbling. At the time, analyst Mark Miller of Noble Financial Capital Markets predicted the firm would need at least a year to return to profitability.
The first-quarter results were also a sharp improvement over the fourth quarter of the previous fiscal year, when Hutchinson lost $14.7 million, or 62 cents a share. Adjusted earnings in the fourth quarter were 54 cents a share. Revenue was $63.6 million.
"As in the preceding quarter, our (first-quarter) shipments benefited from our market share positions on both existing and new customer programs even as worldwide disk-drive and suspension assembly demand remained soft," said Rick Penn, Hutchinson Technology's president and chief executive officer.
Penn said Hutchinson's financial results would benefit from higher production volumes this year, which improve the results from fixed-cost manufacturing, and from the continuing adoption of newer products and the shifting of more assembly work to the firm's Thailand operations.
Steve Alexander 612-673-4553
1st quarter FY2013, 12/302013 2012 % chg. Revenue $63.7 $58.5 +8.9 Income -6.5 -12.5 -- Earn/share -0.27 -0.53 --
Figures in millions except for earnings per share.