Zacks' Voice of the People highlights opportunities with STEC, IBM

STEC Inc. (Nasdaq: [ STEC ]) beats by $0.09, beats on revs; guides Q3 EPS above consensus, revs above consensus (15.66 +0.03). Reports Q2 (Jun) earnings of $0.09 per share, excluding non-recurring items, $0.09 better than the Thomson Reuters consensus of ($0.00); revenues fell 29.1% year/year to $61.3 mln vs the $50.1 mln consensus.

Co issues upside guidance for Q3, sees EPS of $0.18-0.20, excluding non-recurring items, vs. $0.13 Thomson Reuters consensus; sees Q3 revs of $78-80 mln vs. $68.28 mln Thomson Reuters consensus.

STEC Earnings Call Summary (15.65 +0.02) -Update: In prepared remarks, mgmt stated that DRAM accounted for 21% of total revs, while flash accounted for the remaining 79%. They also noted that international sales accounted for 56% of total revs in the qtr...

In Q&A, the co said that ZeusIOPS revs in Q2 were $34.7 mln. In Q3, the co is expected sell about $50 mln in ZeusIOPS... Mgmt said that, at the end of Q2, it had 3 customers that each accounted for greater than 10% of sales... When asked about the industry outlook, mgmt says that what they are seeing in SSD demand is encouraging.

The co cited a recent IBM (NYSE: [ IBM ]) announcement and demand in Japan... The co said that it is qualifying other flash providers to ensure that they have another supplier...

Co says it has seen samples of competitive technologies in SSD, it speculates that it could see competition in 2H11. Additionally, STEC ended Q2 with no long-term debt...

In regards to ASPs, the CEO said, in Q&A, that prices have stabilized, but failed to provide any more granularity... When asked about inventory, mgmt stated that it does not plan on building any NAND inventory in Q3.

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Zacks' Voice of the People highlights opportunities with STEC, IBM