) cut its fiscal year 2005 guidance. William Blair cut its rating on the stock to market perform from outperform.
Analyst Ralph Schackart says the downgrade is due to management's revised outlook for fiscal year 2005 (March), which calls for lower-than-anticipated sales in both North America and Europe. Moreover, he notes the company provided a preliminary fiscal year 2006 outlook for flat EPS year-over-year.
He cut his $3.27 billion fiscal 2005 revenue estimate to $3.09 billion, $1.90 EPS to $1.70, and $3.39 billion fiscal 2006 revenue forecast to $3.2 billion, and $2.01 to $1.69.
He does not view today's announcement as a fundamental issue with the company's business; rather, he believes it's likely the beginning of a transition period to next-generation platforms, which will cause down year(s) for the industry.