JP Morgan downgraded Pemstar (PMTR) to market perform from long term buy.
Analyst Roger Norberg says he was expecting $0.04 fourth quarter earnings per share. He notes, however, sales guidance meets his estimates. He estimates the loss guidance included a $0.06-$0.10 loss on an operating basis, with balance resulting from writedowns of both receivables and inventory. He says the company's margin pressure seems to be materially worse than peers, which he says baffles him.
Norberg thinks the company will need a few quarters to get calibration between revenues and expenses into line. He cut the $0.29 fiscal 2003 (Mar.) EPS estimate to $0.12 EPS, but maintains his $645 million fiscal 2003 revenue estimate.