OCZ Tumbles After Sales Miss Company’s Revenue Projection
OCZ Technology Group Inc. (OCZ), a maker of disk drives, tumbled after reporting preliminary fiscal second-quarter sales that missed the company’s forecast because of supply constraints.
The shares of San Jose, California-based OCZ sank 19 percent to $4.35 at the close in New York, the biggest decline since at least February 2010. Today’s slide extended the stock’s slump for the year to 34 percent.
Sales in the quarter that ended in August will be $110 million to $120 million, down from a prior projection of $130 million to $140 million, the company said in a statement. OCZ said it experienced a shortage of Nand flash memory -- semiconductors used to store data in phones, tablets and other devices -- as the industry curbed production last month to counter a glut that had depressed prices.
“OCZ doesn’t have the purchasing power of the larger Nand consumers so they definitely get the short end of the stick,” said Cody Acree, an analyst at Williams Financial Group, in a research note. “OCZ is working to redesign its products to use more plentiful segments of the Nand spectrum, which should help, but will take time.”
The preliminary earnings report from OCZ bodes well for Micron Technology Inc. (MU), a Nand supplier that slumped 22 percent last year as capacity gains caused an industry-wide glut, Acree said.
“We recommend investors look to OCZ’s pre-announcement as an accentuation of the structural shifts and take advantage of Micron’s lagging share price,” he said.
Micron, based in Boise, Idaho, rose as much as 7.4 percent to $6.65, the biggest intraday gain in two months. Chip-maker SanDisk Corp. (SNDK) climbed as much as 8.2 percent, while Cypress Semiconductor Corp. (CY) increased as much as 6.4 percent.
To contact the reporter on this story: Lisa Rapaport in New York at email@example.com
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org