) second-quarter 2013 adjusted loss per share of 50 cents was
wider than the Zacks Consensus Estimate of 48 cents loss per
share. The adjusted or non-GAAP loss per share excludes employee
severance fees, litigation costs and deferred tax valuation
allowance but includes stock-based compensation expense.
The quarter's loss per share was also significantly wider than
a loss of 36 cents per share incurred in the year-ago period. The
disappointing result was due to continuous revenue erosion.
Total revenue for the second quarter was $23.5 million, down
42.4% on a year-over-year basis. The quarter's result missed the
Zacks Consensus Estimate of $24.0 million and was at the lower
end of the company guided range. The sales decline was due to
market share loss.
Reported gross margin in the quarter was 28.0%, down from 36.6%
in the year-ago quarter. Higher percentage of fixed production
overheads and labor costs on revenues and competitive pricing
pulled down the gross margin. This was partially offset by
favorable flash-component costs.
Operating margin was (130.0%) versus (56.0%) in the year-ago
quarter. The company's total operating expenses decreased 2.1% on
a year-over-year basis. Lower operating expenses were mainly due
to 22.5% year-over-year decline in research & development
expenses. This was partially offset by a 20.9% increase in
general & administrative expenses and 7.9% growth in selling
and marketing expenses.
Net loss on a GAAP basis was $30.4 million or 65 cents per share
compared with a net loss of $49.6 million or $1.07 in the
After excluding non-recurring items associated with cost of sales
and operating expenses after taxes but including stock-based
compensation expense, adjusted net loss for the second quarter
was $23.6 million or 50 cents per share versus $16.6 million or
36 cents loss per share in the year-ago quarter.
Cash and cash equivalents were $116.3 million versus $132.9
million in the previous quarter. Inventories were at $41.5
million compared with $42.1 million in the prior quarter.
Receivables were $8.2 million versus $7.3 million in the prior
STEC's second-quarter results were disappointing as both the top
and bottom lines were significantly down from the year-ago
quarter. The company suffered the seventh consecutive quarter of
The company did not provide any guidance as it has been acquired
by ace hard disk drive manufacturer
Western Digital Corp.
) and will soon start operating under its HGST (Hitachi Global
Storage Technology) unit. The deal is expected to be wrapped by
the end of 2013.
Currently, STEC has a Zacks Rank #3 (Hold). Investors can look
out for similar stocks with brighter visibility.
Micron Technology Inc.
) have a respective Zacks Rank #1 (Strong Buy) and Zacks Rank #2
(Buy) and are worth buying.
MICRON TECH (MU): Free Stock Analysis Report
SANDISK CORP (SNDK): Free Stock Analysis
STEC INC (STEC): Free Stock Analysis Report
WESTERN DIGITAL (WDC): Free Stock Analysis
To read this article on Zacks.com click here.