) sees earnings per share of 12 cents for the first quarter and 63 cents to 81 cents for all of 2003. Jefferies downgraded its investment rating on the shares to hold from buy.
Analyst Barbara Coffey says the company reduced forward guidance due to both the late signing of its fiscal 2003 budget and the longer than expected interruption of one program. She cut her estimates for first quarter revenue from $48.2 million to $43.0 million and EPS of 18 cents to 12 cents; for all of 2003, she lowered her projections for revenue from $240.8 million to $201.7 million and for EPS from 92 cents to 67 cents. Coffey says she had been modeling 2003 revenue growth of 32.7%, but cut that to 10.6%; she also lowered her forecasts for 17.1% operating margins in fiscal 2003 to 15.4%, and 25% long term growth to 15% to 20%. She believes investors will need to see PEC deliver one or more quarters of meeting or beating guidance before the company can win back their confidence.