) increased its revenue guidance for the second quarter of 2012.
Following the news, shares jumped 12.8% in after-hours trade.
The company now expects sales of $50.0 million to $54.0 million,
higher than its previous guidance range of $43.0 million to $47.0
million. Management increased its sales figure by $7 million on
expectations of strong demand for its memory chip testing products
for the computing market.
According to the research firm Gartner, the semiconductor
industry is poised for a rebound, starting in the second quarter of
2012. Gartner reckons that PC unit shipments will increase by 4.7%
in 2012, with both the DRAM and NAND flash memory markets
stabilizing this year.
Hence, the demand from its customers in the DRAM and Flash
memory markets will now be stronger than prior expectations,
helping revenue growth in the upcoming quarter.
However, company CEO Tom St. Dennis stated that the softness in
the personal computer markets and macro uncertainty could restrict
results in the second half of the year.
FormFactor is an OEM of wafer probe cards used by semiconductor
makers to test integrated circuits. The company reported revenues
of $34.8 billion in the first quarter of 2012, up 15.2%
sequentially and down 13.9% year over year. The GAAP net loss was
$17.5 million compared to a loss of $21.4 million in the year-ago
quarter. FormFactor is expected to report second quarter results on
August 1, 2012.
The company continues to burn cash despite the relatively strong
demand for its specialized probe cards. It also has customer and
market concentration that increases execution risks. Increasing
Cascade Microtech Inc.
) is also a matter of concern.
However, we remain encouraged by favorable industry conditions
and the company's improving lead times. This is the reason for
FormFactor's Zacks #2 Rank, which translates into a short-term Buy
(ATE): ETF Research Reports
CASCADE MICRO (CSCD): Free Stock Analysis
FORMFACTOR INC (FORM): Free Stock Analysis
To read this article on Zacks.com click here.