CEO Keith Barnes, who also took the chairman post a few weeks ago, dialed into the earnings call and said the slump was a product of "the volatility in the chip market, the general stock market slump that was occurring at the time, and the negative preannouncements made by other test companies in recent weeks."
That's a quick rehash of an unusual press release sent out Aug. 8, which pulled the shares back from the brink of the abyss. Things have looked rather stable ever since. I can only assume that the "negative preannouncements" Barnes referred to would be from outfits like inTEST
So if things are good despite the price drop, this would be an excellent buy-in point, right? Not so fast. Management also pointed out that the memory chip market might be hitting a speed bump right about now, as two unnamed competitors have seen "sharp declines" in order volumes from that sector. Memory makers like Micron
Verigy serves most of its customers on demand, processing chips as they roll off the manufacturing line with little early warning of volume gains or declines. As a result, Barnes kept repeating that the visibility from his point of view isn't much, so his comments serve more as a snapshot of the state of affairs today than a glimpse of future progress.
In summary then, we're heading into another soft spot for memory makers after a short stabilizing period, and Verigy isn't too sure when that downtrend will let up. Stay tuned.
Fool contributor Anders Bylund holds no position in any of the companies discussed here, as far as he can remember. You can check out Anders' holdings if you like, and Foolish disclosure will test your assumptions to make you a better investor.