) to neutral from overweight.
Analyst Paul Coster says he's removing the stock from the Focus List. He says the 9 cents pro forma fourth-quarter earnings per share was disappointing vs. his 11 cents estimate and the 10 cents consensus. He notes strong revenues were offset by a mix-driven margin decline of over 350 basis points on the consumer side of the business, and higher-than-expected operating costs.
Coster says guidance was very disappointing despite the positive outlook for overall business. He notes seasonal weakness will combine with a decision to delay the launch of a new version of Studio, causing a steep 17.9% sequential revenue decline. Coster cut the 55 cents fiscal 2004 earnings per share (June) estimate to 29 cents.