PREMIUM SEARCH Search by job title, geography and build a list of executive contacts
Merrill Lynch downgraded Scientific-Atlantic (SFA
) to sell from neutral.
Analyst Tal Liani says he was surprised by the first quarter results from the maker of high-speed internet gear and cable set top boxes. He notes the results included $14 million in one-off revenue in Germany. He says he had thought negative trends were already priced into the company's stock. Liani says he thinks Scientific-Atlantic is a great company, adding that it has a 40% share of the market.
However, Liani says the bottom line is that the industry is declining, and average selling prices are falling and internet networking is no longer in the heyday of market penetration. He doesnt' see a recovery on the horizon. He cut his $0.85 fiscal 2003 (June) earnings per share estimate to $0.45, and trimmed the $0.72 fiscal 2004 estimate to $0.33. He says he is ignoring the high cash flow because this is often a phenomena of declining revenues.
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.
Get BusinessWeek directly on your desktop with our RSS feeds.
Add BusinessWeek news to your Web site with our headline feed.
Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.
To subscribe online to BusinessWeek magazine, please click here.
Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
Printer-Friendly Version
