Markets & Finance

Adams Harkness Ups APCC Rating

American Power Conversion (APCC) posted $0.15 second-quarter EPS. Adams Harkness upgraded its investment recommendation on the shares to buy from market perform.

Analyst Eric Prouty says that despite the weak PC and telecom spending environment, he believes the company delivered superior quarterly results. He says results were driven by solid performances from its small- and large-systems segments. Prouty notes EPS upside was driven by strong gross margins of 38%. He says management indicated margin strength came from operations efficiencies due to recent cost-cutting measures in conjunction with a higher revenue base and a weak U.S. dollar, offset by some pricing softness in the small-systems business. The analyst raised his $0.55 fiscal 2002 EPS estimate to $0.57. Prouty has a $13 price target on the shares.

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