) to neutral from buy.
Analyst Jason Mills says the downgrade is based on Visx's material exposure to financially troubled DVI Inc. He doesn't think Visx has fully reserved for the DVI business, and remains exposed to a potential default by DVI. Although DVI hasn't missed a payment to Visx, Mills believes Visx could either take a one-time write-off for uncollectible accounts receivable associated with DVI, or management could raise its allowance for doubtful accounts on the DVI business.
Due to the lack of visibility into DVI, as well as how Visx's management will decide to resolve this issue, Mills keeps his 44 cents 2003 earnings per share estimate and the 75 cents 2004 earnings per share estimate.