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Oct 30, 7:17PM EDT
InvenSense Downgraded On Weak Guidance; Stock Falls
InvenSense (INVN) stock was down 10.5% in morning trading in the stock market Wednesday, a day after the company issued weak revenue guidance for the current quarter. The stock had plunged more than 18% earlier in the session.
Reports speculated that some investors were disappointed when InvenSense, which makes sensors used to detect motion in smartphones, tablets and gaming consoles — enabling a wide range of apps for those devices — didn't report that it had won larger client orders. Observers had speculated InvenSense sensors would be used in the latest Apple (AAPL) iPhones, but that remains unclear.
The San Jose, Calif.-based company said it earned 15 cents a share minus items but including options expenses for its fiscal Q2 ended Sept. 29, down 6.3% from the year-earlier period and 4 cents below the consensus estimate of 13 analysts polled by Thomson Reuters.
Revenue surged 28% to $70.9 million, beating analyst views of $69.2 million.
InvenSense CFO Alan Krock, in a conference call with analysts, said the company expects revenue of $65 million to $68 million in the current fiscal Q3. The midpoint of $66.5 million lags the $67.6 million consensus estimate by analysts.
On Wednesday, Roth Capital Partners downgraded InvenSense stock to neutral from buy. It said in a report that InvenSense reported strong fiscal Q2 revenue growth driven by growth from smartphone client Samsung (36% of revs), high-end Android handsets, Google (GOOG) Nexus 7 and Amazon.com (AMZN) Kindle Fire tablet parts orders. Roth also noted seasonal strength in gaming consoles, and camera image stabilization modules.
But the investment house noted the company gave weak revenue guidance "due to earlier seasonal build patterns and slowdown in high-end smartphone demand."
InvenSense ranks No. 25 in Wednesday's midweek update of the IBD 50, but it's now plunged below its 10-week moving average line.
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