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  • smkros smkros Jan 18, 2013 12:42 PM Flag

    Very bad news for NTE - Sharp Nearly Halts all iPad Screen Production

    I have to admit that this is in no way good news for NTE. My model coming out of last Q's earnings was for Q1 revenues to be flat with Q4 and now I will revise that down significantly. However, one quarter does not make the value of a company and I suspect Apple related orders will rebound in Q2.

    Ever since NTE announced it had reached $1B in revenues through November, and the stock price reached $16, we've seen nothing but an avalanche of bad news mostly directed at Apple.

    The dynamic that I see is that existing NTE shareholders know that Apple is a big driver of business and are quick to sell on bad news from Apple. At the same time, I do not believe the full benefit of being in the Apple supply chain is priced into the stock. You have to be a pretty close follower of NTE to know that it is a supplier of a supplier to Apple.

    Thankfully, we are about to start a couple of weeks of goods news. With the sky falling in all around Apple, I think its earnings release will probably show that the outlook isn't as negative as the market sentiment suggests. Then NTE's earnings will be record revenue and profit for Q4, which will likely attract new buyers to the stock which alone should create some buying momentum. Management will also hopefully announce the 3rd product will start or has started high volume production which will remind everyone that NTE's growth prospects for 2013 are quite good.