Out of the Gate: Hutchinson Technology sinks to year low

NEW YORK—Shares of Hutchinson Technology Inc. dropped to a year low Wednesday morning after the maker of suspension assemblies for disk drives reported a wider fiscal second-quarter loss, leading an analyst to downgrade the stock.

Shares slipped $2.65, or 15.9 percent, to $13.98. The stock set a five-year low of $13.85 early in the session.

Hutchinson plans to cut jobs to save on expenses, the company said Tuesday.

WR Hambrecht & Co. analyst Matthew Kather downgraded the stock to "Hold" from "Buy" and said revenue in the company's biomeasurement division has been dragging down overall profitability. Kather said the unit should be run as a separate entity.

Hutchinson recorded a $5.8 million operating loss in this segment during the quarter.

The quarterly results provide evidence that Hutchinson has lost market share of at least 10 percent over the past year, the analyst said.