Friday, August 26, 2011

Omnivision Quarterly Earnings Call

SeekingAlpha published Omnivision's quarterly earnings call transcript for the quarter ended on July 31, 2011. Some quotes:

Shaw Hong, CEO:

...we achieved record quarterly revenue of $276 million and we shipped over 170 million image sensors. ...On a rolling 12-month basis, I am pleased to report that OmniVision has topped the $1 billion market in total revenues.

...We believe there are many directions for strategic growth... This can lead to opportunities in the field of optic sensors, outside visible spectrum, image data processing, data interface chip, and the system solutions. ...we are leveraging the knowledge we acquired from the Kodak patent that we purchased several months ago. These patents ...greatly enhanced our ability to innovate beyond imaging sensors.

...we have a portfolio of more products based on OmniBSI-2. They will be continuously we released to the marketplace in the coming quarters.

Ray Cisneros, VP Worldwide Sales:

...units sales of sensors 2-megapixel and above represented approximately 37% of total shipments, the same percentage as the prior fiscal quarter. In this category of our BSI based 5-megapixel sensor product line continued to ship at record levels in to various markets and was dominated by the smartphone segment.

...unit sales of sensors that were VGA and below represented approximately 45% of total shipments.


Hasan Gadjali, VP Worldwide Marketing and Business Development:

...our OmniBSI-2 and newer OmniBSI products are also designing with the important 30 frame-per-second feature for camera sensors today. The 30 frame-per-second feature is now narrowing the performance gap between cell phone cameras and point-and-shoot digital still cameras. This is a major technical breakthrough.

The high dynamic range feature or HDR originally used in our automotive products to take pictures under extreme lighting condition is already finding its ways into smartphones ...Most OmniBSI-2 and newer OmniBSI products include this HDR capability.


Anson Chan, CFO:

Our fiscal 2012 first quarter gross margin was 31.7%, 1 percentage point higher than the 30.7% that we reported in our prior quarter.

...our BSI-2 devices ...Consistent with our past experience with advance devices, we anticipate less than optimal yields during this initial rollout and this may translate into a temporary reduction in margin.


...our outlook for the second quarter of fiscal 2012, which ends on October 31, 2011. We currently expect our 2012 second fiscal quarter revenues will be in the range of $255 million to $275 million [compared to 276M this quarter - ISW] This range primarily reflects the expansion of the development cycle with our 8-megapixel product line [Apple iPhone 5 miss? - ISW] as well as cautionary part due to macroeconomic uncertainties with various companies sale already discussed in their earnings calls.

After the disappointing outlook many question were obviously centered on it:

Daniel Amir Lazard Capital Markets:

...can you give a little more clarity on the guidance here I mean typically your quarter is up, you guided now. ...could give any clarification that would be helpful.

Ray Cisneros:

In term of the macroeconomics I think what everything that’s going on in the markets; we saw some unsettling in our numbers in front of us. So, in particular in some of the bigger segments such as the notebook and PC segments, those recent events definitely have some perturbations in the marketplace. So, we’re taking a cautionary approach when we look at that those kind of situations. And everything what’s happening in the economy globally is certainly we feel probably influencing some of the numbers.

Raji Gill, Needham & Company:

...this extension of the development of the product cycle on the 8-megapixel, which has to do with smartphones. Could you maybe elaborate what’s going on there? Has that resulted in share loss at some of your key accounts, any details there would be helpful?

Ray Cisneros:

Sure. ...I think the way to look at is when we launch a product, this 8-megapixel is not any different than all our other products that we attempt to launch. It’s quite intensive and extensive R&D and development. So that means, we plan on, I would say, a development lifecycle. And once we execute on that we go into mass production. So, what we see in our 8-megapixel plan is we have a plan and our plan is to hopefully hit at the tail end of this quarter as we mentioned when we can start delivering the 8-megapixel.

Seeking Alpha reports that as of August 25, 5:11PM ET, Omnivision shares plunge -30% in after hours trading following the weak guidance.

10 comments:

  1. Hmmm, guess that "best company, 5:1 work product/engr ratio" comment jinxed the stock.
    Lost half a billion dollars in value in one day.

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  2. wow....30% loss in stock value in a day is huge! Maybe its not always a good idea to go public!

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  3. dollars are just dollars, value is the value indeed. who knows what is behind the market.

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  4. How about Aptina, Eric? It seems that you are tuned to Wall Street :)

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  5. Time to buy OV stock!

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  6. Aptina(Micron Imaging) had their run with Motorola back in 2006 and now OV had theirs with Apple. Engineers in the image sensor field from USA shouldn't rooting for either Aptina's or OV's failure. If Sony (and Samsung) eat their lunch, these are the people who will end up in unemployment line.

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  7. image-sensor-"WORLD"

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  8. When OV or Aptina fails, the US guys can work for Samsung, like one of them already ...

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  9. deep insightful views on Aptina and OV :)

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