On Thursday night, we'll see a fresh first-quarter report from digital imaging expert OmniVision Technologies
What analysts say:
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Buy, sell, or waffle? Fifteen analyst firms follow this stock, with five buy ratings versus one sell, and nine holding still in between. In our Motley Fool CAPS database, it's a four-star stock based on input from 550 of your fellow Fools.
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Revenues. The analyst consensus points to about $160.3 million, up 17% over last year's $136.9 million. That's smack in the middle of management's guidance range of $155 million to $165 million.
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Earnings. The company issued guidance here, too, from $0.13 to $0.21 per share on a pro forma basis. Wall Street hopes to see $0.19 per share, on average. Either way, it'll be severely short of the year-ago $0.39.
What management says:
I'd like to snag a line concerning competition from the company's recent 10-K filing: "We operate in an industry characterized by intense competition, rapid technological changes, evolving industry standards, declining average selling prices and rapid product obsolescence."
What management does:
Uh-oh. I would like to say something positive here, but wouldn't know where to start. My mom always told me to say something nice or nothing at all, so I'll let you ponder the gravity of these margin, sales, and income trends on your own. Some explanation awaits you further down.
|
1/06 |
4/06 |
7/06 |
10/06 |
1/07 |
4/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
36.5% |
39.3% |
37.6% |
37.0% |
33.3% |
31.7% |
|
Operating |
22.2% |
23.9% |
21.9% |
20.6% |
15.4% |
12.7% |
|
Net |
18.2% |
18.1% |
17.0% |
13.5% |
8.9% |
4.5% |
|
FCF*/Revenue |
16.1% |
23.2% |
17.7% |
9.7% |
4.9% |
(7.6%) |
|
YOY Growth |
1/06 |
4/06 |
7/06 |
10/06 |
1/07 |
4/07 |
|---|---|---|---|---|---|---|
|
Revenue |
20.4% |
26.8% |
38.3% |
27.1% |
16.8% |
7.4% |
|
Earnings |
5.9% |
16.7% |
27.8% |
(3.0%) |
(43.1%) |
(73.1%) |
One Fool says:
Six months ago (time flies!), fellow Fool Dan Bloom called OmniVision's business model "as stale as last year's fruitcake." I'm also told that after the final apocalypse, only rats and roaches and fruitcake will remain -- until the critters die of starvation. Surely Dan didn't mean that OmniVision is forever?
What the company makes is image sensor chips for digital cameras of various persuasions. That sector is packed with competitors, like nuts in a fruitcake. Rivals include Micron
Whew! So how does OmniVision plan to avoid being commmoditized out of existence? Well, for the last year or so, the company has promised us a cutting-edge image processing chip that takes unfocused images and gives them crisp, sharp focus through some digital magic -- faster and simpler than the traditional array of moving lenses, and with no moving parts to worry about.
That would be great, if we could only get our grubby little consumer hands on those products one fine day. There were code bugs in early chip iterations, and I have yet to see a street camera with this WaveFront technology. Not in stand-alone cameras, nor in camera phones, nor gadgetry from Apple
Plus, several competitors are said to be working on similar products. It's hard to stay ahead of the commodity game, and unless that wonder chip hits store shelves in quantity soon, OmniVision might be remembered as but a cheery cherry in the fruitcake of camera tech, when the roaches discuss that timeline with the rats at the end of time.
Fool contributor Anders Bylund holds no position in any of the companies discussed here, but his digital camera is a Sony model, vintage 2002. You can check out Anders' holdings if you like, and Foolish disclosure is the prognosticator of prognosticators.
