OVTI - OmniVision Technologies - Page 2

ugly report...but analysts keep at hold and outperform
would love to see retest of 11s

OmniVision Technologies Third-Quarter Profit Surges; Fourth-Quarter View Misses Estimates; Shares Down
3 days 15 hours 6 minutes ago - DJNF


By Tess Stynes

OmniVision Technologies Inc.'s (OVTI) fiscal third-quarter earnings surged as the chip maker's revenue more than doubled.
However, shares fell 9.2% to $14 in after-hours trading as the company's fiscal fourth-quarter outlook was sharply below expectations. Through the close, the stock is up 9.4% this year.
For the current quarter, the company forecast per-share earnings of 14 cents to 29 cents on revenue of $300 million to $330 million, well below recent estimates of analysts polled by Thomson Reuters for 32 cents and $371 million, respectively.
OmniVision generates the biggest chunk of its business in the smartphone sector, and its results have been closely linked to that market. Its products include camera sensors for phones, including Apple Inc.'s (AAPL) iPhone.
The company has seen high manufacturing costs put pressure on its margins, an area OmniVision has been seeking to improve. In the latest quarter, gross margin fell to 16.9% from 24.2%. However, that represented a small improvement from 16.6% during the fiscal second quarter.
For the quarter ended Jan. 31, OmniVision Technologies reported a profit of $21.3 million, or 40 cents a share, up from $111,000, or break-even on a per-share basis, a year earlier. Excluding items such as stock-based compensation, adjusted earnings were up at 56 cents from 13 cents. Revenue more than doubled to $423.5 million
The company in November expected earnings of 33 cents to 46 cents on revenue of $390 million to $425 million.

OMNIVISION (OVTI) POSTS HIGHER Q3, BUT WEAK OUTLOOK. RAYMOND JAMES DOWNGRADES
2 days 21 hours 36 minutes ago - SNPMarketScope

Analyst Hans Mosesmann tells salesforce downgrading OVTI to mkt perform from outperform as he's: 1) no longer comfortable with increased volatility in biz model; 2) increasingly skeptical co. will be able to improve currently depressed gross margins; 3) not aware of any NT catalysts to raise ests. Says, while stock remains inexpensive, Q3 results were solid, he thinks limited visibility into earnings will keep stock's trading multiple depressed for at least H1 '13. Cuts $1.88 CY 13 non-GAAP EPS est. to $1.42, $2.40 CY 14 to $1.83 on lower rev., GM assumptions. B.Egli.

S&P LOWERS OPINION ON SHARES OF OMNIVISION TO SELL FROM HOLD
Now - SNPMarketScope

We lower our target price by $4 to $12, as we lower our P/E based valuation multiple to 18X from 30X, within its historical range. We raise our FY 13 (Apr.) EPS by $0.14 to $0.68 and FY 14's by $0.23 to $0.86. OVTI beat Jan-Q expectations but guided well below consensus as its business remains very volatile. Because we believe further price pressure and market share erosion are likely, we lower our valuation. We see gross margins remaining in the mid-teens, significantly below the 20% to 30% range experienced in the prior two years, limiting margin leverage..

weak outlook and downgrades a drag but holds up after weak open last fri