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What: Shares of Rubicon Technology (NASDAQ:RBCN) dropped more than 16% Friday after the sapphire specialist turned a wider-than-expected first-quarter loss.
So what: Quarterly sales rose nearly 72% year over year to $14.3 million, but that translated to a net loss of nearly $10.9 million, or $0.43 per share. Analysts, on average, were looking for a loss of $0.33 per share on sales of $12.95 million.
Worse yet, Rubicon expects a loss in the current quarter between $0.38 and $0.46 per share, which is also well below expectations for a Q2 loss of $0.20 per share.
Now what: Regarding the bottom-line miss, Rubicon CFO William Weissman explained, "Idle plant and development costs at our wafering facility are the main cause of our negative margins. However, utilization will be improving with the recent sales activity and we expect wafer costs to come down over the course of this year as we move from development to production."
To be sure, Rubicon did just receive the first production orders for both its recently introduced patterned sapphire substrates, as well as its four-inch polished wafers, which began toward the end of the first quarter. As a result, while Rubicon's current losses certainly aren't ideal, the pullback could prove short-lived when its efforts begin to gain traction over the next couple quarters.
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