) to hold from buy.
Analyst Trip Rogers says he sees shares as range-bound in the near term due to a gloomier outlook for California transportation funding, and the company's inability to achieve expected results in the first three quarters of 2002. He notes the $34.8 billion California budget deficit has led Gov. Gray Davis to propose a $1.8 billion cut in transportations spending.
Rogers says these cuts could impact spending over the next 18 months, and lead to the cancellation of many long-term projects. Given that outlook, as well as the company's earnings per share shortfalls earlier in 2002, he cut the 17 cents fourth quarter earnings per share estimate to 12 cents, near the low end of the company's 10 cents to 20 cents guidance. Rogers also cut the $1.25 2003 earnings per share estimate to $1.05, and trimmed the $20 target to $17.