Thursday, January 27, 2011

Hutchinson Technology (NASDAQ:HTCH) Still A Couple of Years Away from EPS Breakeven

Saying Hutchinson Technology (NASDAQ:HTCH) is at best still a couple of years away from EPS breakeven, Needham recommends staying on the sidelines with this one for now.

Needham says, "Although there were some bright spots in F1Q (such as yield improvements for TSA+, qualification by a customer for the new Thailand facility, and a smaller drag from the Biomeasurement business) times remain challenging for Hutchinson. The company needs to achieve roughly $92-95M in revenue for operating breakeven and -$100M for EPS breakeven, which we estimate MIGHT be possible by the end of F12. Consequently, we continue to take a cautious Hold stance on the stock as this drama unfolds."

Needham & Company reiterates a "Hold" rating on Hutchinson Technology (HTCH), which closed Wednesday at $3.41, gaining $0.20, or 6.23 percent.

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