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Power-One Inc. Message Board

  • hageneriksson hageneriksson Oct 25, 2012 6:22 PM Flag

    conference call - some remarks

    all in all the conference call was nothing to write home about. Management sounded generally optimistic about the company's prospects going forward (as always of course) but offered very little insight into their 2013 planning assumptions:

    what could be learned was that 2013 revenues will be DOWN with a very weak Q1 due to winter in Europe and new product introductions.

    prices will also be down by around 10-12%.

    Europe revenues will be down 10-20% (or did the say 15-20%?) due to FIT reductions, management admitted that they won't be able to replace these revenues completely.

    recently reduced temporary workforce in Italy

    when asked about its prospects for staying in the black while biggest competitor SMA sees only break-even at best the company hinted to its flexible cost structure but didn't say they will be able to achieve profitability.

    Bottom line:

    well managed company with lots of cash on the balance sheet. Unfortunately the weak outlook for Q4 and even more pronounced FY13 will keep the stock from moving up.

    this is going to dead money well into FY13 when the big picture might become somewhat clearer

    keep in mind that margins, earnings and cash flows will be down going forward, the company might even produce losses at the beginning of FY13 - all of these will make the stock look more expensive going forward.

    Would expect modest selling pressure tomorrow and analysts to remain on the sidelines for now - I do not expect the stock to drop below $3.50 until the next earnings release.

    At this point I do not consider the stock a wise investment as 2013 is still a black box - if the company starts to record losses the stock still has ample room to fall.

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    • Two points,first: the 10 -12 % price erosion was for this year,and for the industry it was 15%, They expect erosion to continue but did not say how much.Second; 1st qtr sales is always seasonally slow, By the way they have winter in Europe every year.

 

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