Stock Earnings Estimates Under Consideration: Hutchinson Technology Inc. (HTCH)

The shares of Hutchinson Technology Inc. (NASDAQ:HTCH) currently has mean rating of 2.33 while 1 analysts have recommended the shares as “BUY”, 0 recommended as “OUTPERFORM” and 2 recommended as “HOLD”. The rating score is on a scale of 1 to 5 where 1 stands for strong buy and 5 stands for sell.

The company’s mean estimate for sales for the current quarter ending Jun 16 is 54.65M by 2 analysts. The means estimate of sales for the year ending September-16 is 233.85M by 2 analysts.

The mean price target for the shares of Hutchinson Technology Inc. (HTCH) is at 4.00 while the highest price target suggested by the analysts is 4.00 and low price target is 4.00. The mean price target is calculated keeping in view the consensus of 3 brokerage firms.

The average estimate of EPS for the current fiscal quarter for Hutchinson Technology Inc. (HTCH) stands at -0.25 while the EPS for the current year is fixed at -0.74 by 2 analysts.

The next one year’s EPS estimate is set at -0.66 by 1 analysts while a year ago the analysts suggested the company’s EPS at -0.74. The analysts also projected the company’s long-term growth at 5.00% for the upcoming five years.

In its latest quarter ended on 31^st March 2016, Hutchinson Technology Inc. (HTCH) reported earnings of $-0.25. The posted earnings missed the analyst’s consensus by $-0.03 with the surprise factor of -13.60%. In the matter of earnings surprises, the term “Cockroach Effect” is often implied. Cockroach Effect is a market theory that suggests that when a company reveals bad news to the public, there may be many more related negative events that have yet to be revealed. In the case of earnings surprises, if a company is suggesting a negative earnings surprise it means there are more to come.

On April 27, 2016 Hutchinson Technology Inc. (HTCH) reported net sales of $54.2 million for its fiscal 2016 second quarter ended March 27, 2016.  Suspension assembly shipments for the quarter totaled 85.4 million compared with 106.6 million in the preceding quarter.  Rick Penn, Hutchinson Technology’s president and chief executive officer, said that shipments were at the low end of the company’s expectations for the March quarter, which is typically a seasonally slower period for the disk drive industry and its suppliers.

Gross profit in the fiscal 2016 second quarter totaled $5.7 million, or 10.5% of net sales, compared with $11.7 million, or 18.3% of net sales in the preceding quarter.  Gross profit declined sequentially due to the decreased volume, resulting in lower leverage of the company’s capacity and fixed costs.