Omnivision Quarterly Results Better Than Expected

Seeking Alpha publishes Omnivision Quarterly Earning Call transcript. OmniVision lost $20.1M this quarter, including stock-based compensation expenses on revenues $89.1M. The previous sales guidance was in range of $60-70M.
VGA and below represented an approximately 70% of the unit sales. Unit sales of 1.3MP products were just above 10%. Unit sales of our 2MP and above products were approximately 15% as compared to 20% in the previous quarter.

Ray Cisneros, VP Sales said about BSI progress:

"Sales of our new Omni BSI five megapixel and eight megapixel products will begin in the current quarter and should increase in volume throughout fiscal 2010. We are consistently winning new designs with these two product lines across multiple regions, in particular with smart phone designs.

Strength in sales will be driven by end customers in North America and Taiwan regions. Most recently, end customers in China have also adopted the Omni BSI five megapixel solution. We believe our Omni BSI technology is being viewed as a differentiator for end customer product designs."

"Our eight megapixel Omni BSI solution will begin shortly to a tier one OEM customer for a digital video camcorder product."

Ray Cisneros on WLC progress:

"We are also pleased that we recognized initial revenues in Q4 on our CameraCube products for the mobile phone market. There is a high degree of interest for this product line in major OEM's as well as mass market regions in Asia. The first shipments are VGA CameraCube products where cost and manufacturing efficiencies of this technology are most highly leveraged."

Bruce Wyer, VP Marketing:

"Based on TSR's calendar 2008 data, we retained our number one position in overall market CMOS sensors based on shipments, broadening our market share lead in key merging markets.

Based on TSR's data, OmniVision now holds the number one market share position in the mobile phone, notebook webcam, security and surveillance, automotive, digital video camcorder and toys and games markets."

There is Q&A part on yields and margins of BSI and CameraCube products:


Doug Freedman – Broadpoint:

"If I could try to get some color on the gross margin opportunity that you have. I know you don't want to break out things on a megapixel basis. How about giving us an idea of the impact that say CameraCube has if you convert some of the market in your VGA sockets over from VGA dive products into VGA CameraCube or as you move people from standard product into DSI. Can you give us some idea if these are margin accretive or at what point they'll be margin accretive?"

Anson Chan, CFO:

"The CameraCube is still early on in its life cycle and not so different from our other products. When the product is first introduced, the yields tend to be a little lower and so the margin contribution coming from this product is a little lower right now. It's hard to estimate exactly when we'll get to a healthier margin because it takes a bit of time for the market to adopt these products and start to turn into high production volume.

But the expectation though is that it will be accretive to our margin when we reach a steady state for this product rollout."

Doug Freedman – Broadpoint:

"And how about for the BSI product. What does that look like?"

Anson Chan:

"The BSI product is going to be similar in the sense that it's still very early on in its life cycle. Right now, even internally I would not use the current projected gross margin as the long term goal for this product yet and we still have not reached a point where we can precisely calculate the margin contribution coming from BSI products."