Friday, August 1, 2014

Random thoughts: Venture's Q2 crystal ball glazing

The US earning reporting season is almost over. I decided to look at Venture's competitors and customers results to guage the odds of a QoQ improvement in revenue and Gross profits.

It seems like the odds are good.

Venture's closest competitors, Plexus and Benchmark electronics, with overlapping sector of customers, both did well in this most recent quarters. Both register YoY and QoQ growth in both revenue and gross profits. Margin are stable.

benchmark electronics

plexus

It can be seen that almost all segments show QoQ growth, all except Plexus's Networking segment, due to loss of Juniper as a customer.

These 2 companies are closest comparables.

The next closest comparable,Jabil circuit,has a rather big Low mix, high Volume EMS segment,so I thought it is not a direct comparable. Nonetheless, it also shows QoQ growth in both revenue and gross profits but significantly negative YoY growth.

Other peers suggested by Maybank like Langard Precision, Planar system, have different products,Planar system deal with Video systems, Langard Lens. Both are showing QoQ and YoY growth.

Next,the customers. That is tricky. Venture has a total of 187 customers.

Big names like HP, Aigilent, NCR, Waters, Glory, Micros, avago, etc etc, show a mostly improving picture. But oclaro, Veriforne, etc has not report their earning yet, HP is flat, So I will not go into details here. Just a snapshot of NCR prsentation of their retail solution segment (POS). Outlook is also generally positive

ncr

NOte their backlog will push revenue to improve end 2014 and 2015. Manufacturing of the hardware might have already taken place.

Ok, if Venture end up having negative QoQ revenue and gross profits, its competitive strength is then ... I will lose some sleep... I used gross profits instead of net profits due to the effect of possible 1-off items and high tax rate. If NP is flat but Revenue and Gross profits are improving, I will be more tolerant.

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