Rubicon Technology (RBCN) Beats, But Down AH On Poor Guidance

Rubicon Technology (RBCN) reported earnings results after the bell today that were ahead of analyst estimates, but the stock is getting hit more than 12% in after hours trading on very weak guidance.

The company reported an EPS number of .35/share on revenues of $33.6 million which was above the analyst estimates of .26/share on revenues of $31 million.  The company attributed the strong results to strong sales of its six inch polished wafers which accounted for nearly $25 million in revenue during the quarter. 

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Raja Parvez, President and CEO of Rubicon Technologies, commented, "Although overall substrate demand from the LED market declined in the third quarter, major LED chip manufacturers continue to focus on migrating to larger diameter substrates in order to gain efficiencies. As a result, we had strong growth in revenue from our six inch polished wafers which helped to compensate for reduced orders of two through four inch sapphire cores."

Ah, but the good news ends there.  The company is reporting very weak guidance for this quarter of just $20 – $23 million in revenue with an EPS in the .07 – .10/share range.  That’s well below the analyst expectations of $32 million in revenue and .26 in EPS.

CEO Parvez said he isn’t seeing improved demand as he had previously expected and continues to see excess inventory throughout the supply chain.  As a result he expects further price pressure on the two to four inch sapphire cores.

While shares saw a spike on the China news Friday, those gains are evaporating with the stock down 12% in after hours trading.  It looks like the stock will take out support of the 50 day moving average in the morning, but should it recover and close above this support area, it could be yet another indication that the worst is over for shares of RBCN and that a new uptrend is near. 

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