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|  | FEBRUARY 14, 2005
 WORD ON THE STREET Goldman Downgrades Armor Holdings Analyst Glenn Engel says the security product company's earnings peaked in the first-half of 2005 and sees a drop in its Aerospace & Defense unit's revenues in 2006 and 2007 Goldman Sachs downgrades Armor Holdings AH to underperform from in-line. On Friday, the company posted 74 cents fourth-quarter earnings per share. Analyst Glenn Engel says results were a few pennies short of his estimate. He says margins on vehicle armor dropped a bit more than expected and stock option expensing will cost 2 cents to 3 cents per quarter. Therefore, he cuts $3.00 2005 earnings per share estimate to $2.85 (company guidance is $2.75 to $3.00) and $2.35 2006 earnings per share to $2.25. He downgrades on the belief that earnings per share will have peaked in first-half 2005. Engel says the need to build inventory of vehicles and body armor, and fill non-Army deferred demand will provide some support for production in second-half 2005, but he sees a 36% drop in its Aerospace & Defense unit's revenues in 2006 and a further drop in 2007.  All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
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