PRI Automation (Nasdaq: PRIA) tanked Tuesday after the maker of automation systems and software for chip manufacturing warned it would miss analyst forecasts by a long shot in its fourth quarter.
Shares fell 17.56 to 25.13 Tuesday morning.
After market close Monday, PRI said it sees earnings slightly above breakeven for the three-month period ending Sept. 30. First Call's survey of 13 analysts were predicting a profit of 52 cents per share.
In a Tuesday morning conference call, Mitch Tyson, president and CEO, said the company's earnings miss was "unacceptable" and reiterated that PRI's problems are company, not industry, related. He also said demand looks good as the chip sector remains in an upturn. But PRI is the second chip capital equipment maker in a week to warn of disappointing results. SpeedFam-IPEC (Nasdaq: SFAM) said Thursday it would miss estimates, also citing company-specific issues, rather than market conditions.
PRI blamed the shortfall on its inability to produce the latest TurboStocker product, which stores and retrieves chip wafer carriers. TurboStocker was supposed to reach high volume production in the fourth quarter.
To fix the problems, PRI is working on its manufacturing processes and refocusing its marketing. "We were winning 70 percent of our accounts and it was tough to keep up," said Tyson in the call, referring to the company's inability to meet demand. "We did not execute the ramp well."
PRI forecast revenues of about $84 million for the September quarter, and said it will take about two quarters to remedy its problems. Officials said the company will work off the current backlog in the first and second quarters of fiscal 2001. In the second half the company sees revenue growth topping 40 percent
"We are confident we can fix this," said Tyson. "We understand there's an additional challenge to regain credibility."
Shares in semiconductor equipment makers fell sharply in early August following a warning from chip assembly equipment maker Kulicke & Soffa Industries Inc. (Nasdaq: KLIC) that shipments had been delayed and its quarterly results could be dented. PRI's other competitors include Brooks Automation (Nasdaq: BRKS) and Asyst Technology (Nasdaq: ASYT).