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OCZ Technology (OCZ) Says Cannot Estimate Form 10-Q Filing Date For 2Q

 October 12, 2012 03:03 PM

(By Balachander) OCZ Technology Group Inc. (NASDAQ:OCZ) shares tumbled on Friday after the data-storage company disclosed that it cannot currently estimate the exact filing date of the Form 10-Q for the quarter ended August 31, 2012.

The San Jose, California-based maker of solid-state drives (SSDs) had said it will delay the filing of its Form 10-Q for the second quarter ended Aug. 31, principally due to the impact of customer incentive programs.

On Wednesday, the company forecast a significant net loss for the second quarter and said it expects revenue to be materially lower than its prior forecast. It also appointed board member Ralph Schmitt as its president and chief executive officer, effective immediately.

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"Of course, you should assume that our cash position has also declined and we've accessed our credit facility," Schmitt said in a conference call.

OCZ had last month reduced its revenue guidance to $110 to 120 million for the second quarter from $130 to $140 million due to constraints in NAND flash supply. The company posted revenue of $113.6 in the first quarter and $78.5 million for the second quarter of last year.

FBN Securities downgraded the stock to "Underperform" from "Sector Perform" in September and lowered price target on the stock to $4 from $6.

Shebly Seyrafi, an analyst at FBN is of the view that OCZ has been struggling with weaker-than-expected demand over the last few quarters that led to a deterioration in its balance sheet, and now this deterioration is manifesting itself in much weaker-than-expected revenue.

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Compounding its near-term difficulties is its relatively high exposure to Europe (46 percent revenue), the analyst had said and added that the recent announcement of the retirement of CFO Arthur Knapp (after a replacement is found) is also not encouraging.

Merriman downgraded the stock to "Neutral" from "Buy" on Wednesday.

On Friday, shares tumbled 25 percent to trade at $4.02. In the 52-week period, the stock has been trading between $3.90 and $10.05.

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