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Tuesday, April 29, 2008

FormFactor (FORM) trying out a smaller size

FormFactor is terribly dependent on the memory market. Don't like these guys, think the accounting stinks, think they can't hold onto anyone who has to sign off on the financial documents, its a mess. I've discussed them before.

Last quarter they lowered revenue guidance to $75-80mm from a previous mean of $120mm. They missed the low end of their forecast by another 10mm and came in at 65mm. As if that weren't bad enough, business has subsequently dropped off a cliff and they're guiding the following quarter to 40-45mm if I heard them correctly and they're going to print big losses. So much for the book value will bail you out story. They're going to cut more heads and pray this is the trough. There is no guidance from them on an upturn of any kind. Last quarter they were saying this was a product transition and they'd recover from it in Q3. Sounds like thats off the table.

DRAM capacity additions aren't coming back any time soon and all the consolidation and shuttered capacity coming is going to reduce the market for their products going forward in addition to creating existing equipment overhang.

I still hate it.

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