Markets & Finance

Merrill Downgrades QLogic to Neutral

Merrill Lynch downgraded QLogic (QLGC) to neutral from buy.

QLogic warned of lower fourth-quarter earnings per share amid an order decline. Analyst Shebly Seyrafi says QLogic has recently been experiencing slower revenue growth. He believes the lower p-e is warranted due to slower growth. He says QLogic's recent execution has been weaker than expected. He notes the company said fourth-quarter results would fall short of its own expectations and the Street's expectations.

Seyrafi now sees about $128 million in fourth-quarter revenue, down 6.6% sequentially, vs. the previous guidance of 1% to 3% sequential revenue growth. He thinks the main culprit was a decline in host bus adapter orders from two of its original equipment manufacturers at the end of the quarter. Seyrafi cut the $1.72 fiscal 2005 (Mar.) earnings per share estimate to $1.51, and cut the $2.01 fiscal 2006 earnings per share to $1.73.

China's Killer Profits

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

blog comments powered by Disqus