Markets & Finance

First Albany Cuts Computer Network to 'Neutral'

First Albany downgraded Computer Network Technology (CMNT) to neutral from buy.

Analyst Mark Kelleher says his downgrade is due to lower growth rate estimates, and uncertainty over the strength of Ultranet (Wide Area Network) products. He's also concerned about competition in the Fibre Channel-Director market, where McData and Brocade are entrenched, and where Cisco is also entering the market.

Kelleher says the $52.3 million in first-quarter revenues fell below his $54.5 million and the Street's $53.6 million estimates. The 3-cent pro forma loss beat the Street's 4-cent loss estimate, but didn't beat his 1-cent loss estimate.

Based on the recent merging of Inrange with Computer Network, he cut his 14-cent fiscal 2004 (Jan.) earnings per share estimate to 10 cents, and upped the 22-cent fiscal 2005 earnings per share estimate to 25 cents. He also cut the $9.30 target to $6.25.

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