BusinessWeek: January 11, 1993

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THIS STOCK DOESN'T SCAN

The world leader in portable bar-code scanning equipment, Symbol Technologies, disappointed investors this year as its stock tumbled from a high of 26 early in 1992 to 13 by yearend. And according to some savvy pros, the slide is far from over.

Analysts expect Symbol to post a loss for the fourth quarter, ending in December, because weak retail sales crimped profit margins. Recent moves to streamline operations in an effort to cut costs should be encouraging news--but not good enough for these pros. They still rate the stock a sell.

They have even scaled back their already depressed earnings estimates for 1993, despite the improving retail environment. Analyst Robert Mains of First Albany has cut his estimate for 1993 from 70 a share to 53 . While he considers Symbol a good company, Mains doesn't think it's worth 22 times next year's earnings. He sees the stock falling to book value--6 a share.

Symbol's restructuring plan to integrate its Bohemia (N.Y.) bar-code laser scanner operations with its California production of portable data collection systems should have a positive effect over the long term, Mains concedes. Still, he figures that revenues will grow only about 5% from 1992's level because of lower sales that began in the third quarter. And he expects business to remain soft, despite signs that new-product sales are ramping up. Warns Mains: "We still don't find any evidence of a strong pickup in orders."

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