) to neutral from outperform, citing the company's quarterly results announcement on Friday.
The company said it had 18 cents earnings per share in the third quarter.
Analyst Richard Eastman says the company's results and sales were below estimates. He noted that management attributes the third quarter sales shortfall to European market weakness and a corresponding slow response by its local sales organization. He says he's not confident the company can regain/sustain 25% to 30% sales growth. While believes secular growth trends underlying the company's products and market position remain intact, its sales execution and gross margin slippage are new issues, compounding previous uncertainty over 2006 operating leverage potential. He cut his $1.40 2006 earnings per share estimate to $1.05.