While there has been no official company press release for the Q3 2010 earnings conference call, it is expected that Yahoo! Finance shows the event occurring on Monday, October 25th, but the accuracy of this has not been confirmed. will host their call within the next week or so.
Generally, it is expected that the company will post an $0.11 loss on $5 million in revenue, compared to a $0.12 loss on less than $1 million in revenue during the same period a year ago. Revenue growth, as most people know, is being driven primarily by sales of its ShowWX™ laser pico projector and shipments of its PicoP® embedded module (PEM). Both of these make up the $20.1 million backlog . All investors will be focused on two primary items: 1) the status of the green laser ramp and; 2) the status of the OEM “high-end media player”. Let’s look at these two items in a little more detail:
1) Green laser Ramp – Microvision has guided to 10k units/month in Q3 and 10k-15k units/month for Q4. We have no reason to believe this guidance will change significantly. Recent communications with the company has verified this. Investors will be looking for guidance on the G-2000 green laser timing as well. Communications with Corning indicate that the G-2000 should be released into production in early 2011, a slight change from Q4 2010. Hopefully, Microvision can add some color here. Corning has certainly been a bottleneck for the company in the past and any confidence in managing Corning (and more generally the green laser supply as a whole) would be quite beneficial. Microvision has to do a better job of showing investors that they have control of their future. To date, they have projected (no pun intended) themselves as a victim, rather than a company who is acting swiftly to manage their future.
2) Status of the OEM “high-end media player” – Everyone has been expecting news of the OEM “high-end media player” for a while now. Most people had expected a product launch before the 2010 holiday season. However, this seems to be less likely to occur with each passing day. Microvision had indicated that the yet-to-be-named OEM would announce the launch of this product. If, in fact, there are delays, as some speculate, Microvision management needs to explain some details as to why, as opposed to simply requesting that investors “be patient”. This can easily be accomplished without revealing the OEM name. Are there manufacturing challenges? Is the OEM still committed to the media player? Are they waiting to get the product “right”? As long as people have the data, they can make reasonable assumptions/estimated. Leaving investors in the dark is the worst thing management could do. There is a remote chance we could get the OEM name and launch timing in the Q3 2010 press release, but I am not betting on that outcome.
In addition to these two items, there are a host of other issues the company could address to help shareholders (and prop up the all-but-dead stock):
1) Invoking confidence in minimizing dilution due to the
2) Provide some concrete updates on the and programs
3) Provide some detail on the potential for additional military contracts for the program (or better yet, the potential for purchase orders)
4) Identify the real potential for products related to “Project Tuatara” with their partners Intel and Capcom
5) Give actual guidance (with some level of confidence) with regards to additional green laser suppliers and volumes for 2011
6) Provide an update on the status of the 720p HD projection engine; Are they still on track for launch in mid-2011?
7) What is the status of their partnership with Motorola?; Are they still holding weekly meetings?; Do they currently have plans to launch PicoP®-based products in the next 12-24 months?
There are many other things the company could discuss. This list is easily something that could be addressed in a 60 minute call. There is no need to limit it to the 20-30 minutes they have been. More information = More confidence.
We’ll be sure to provide full analysis of the Q3 2010 earnings results when they are announced.
Disclosure: as of this writing, the author was long shares of Microvision (NASDAQ: )