JP Morgan Cuts Sonic Solutions to Neutral

Cites the company's poor earnings guidance.

JP Morgan downgraded Sonic Solutions (SNIC ) to neutral from overweight, citing the company's poor earnings guidance.

Analyst Sameer Doctor says the company's new fiscal year 2007 guidance implies organic growth of only 16%. He cut his $1.21 fiscal year 2006 earnings per share estimate to 80 cents and his $1.43 fiscal year 2007 estimate to $0.95. He says the business may be going through a transition, with a ramp in professional solutions several quarters out, while original equipment manufacturer revenue could flatten until high-definition penetration drives the next phase of growth, probably at least 24 months out.

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.
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