Analyst Ashok Kumar says he believes first quarter revenue guidance is at risk. With the competitive environment turning malignant, he thinks Genesis will be able to maintain its share in the short-term only at the expense of significant price erosion.
He now expects flat panel display (FPD) controller application server processes (ASPs) to decline about 10% sequentially in the first quarter. Margins are expected to be under pressure near term as prices decline ahead of cost reduction. Manufacturing issues further exacerbate these trends.
Kumar cut the $1.13 fiscal 2003 (March) earnings per share to $0.89, and trimmed the $260 million revenue estimate to $237 milliion. He thinks the stock would present a more attractive risk/reward profile around the mid-teens.