Merriman Curhan downgraded Novatel Wireless (NVTL

) to neutral from buy, after the company on Wednesday posted fourth quarter results.

Novatel had a breakeven fourth quarter, compared to 17 cents earnings per share (EPS) during the same period of the previous year.

Analyst Kevin Dede says the company's earnings per share (EPS) on an operating basis were in line with his forecast. He thought Novatel was uniquely positioned to capitalize on an uptake of services on 3G networks. Instead he says the company is mired by a slower-than-expected technology upgrade to the HSDPA network in Europe, as well as strong competition in that market, all compounded by a large transformation in the type of customers it addresses. While he praises this management team on past effectiveness, he needs to see proof that this team can be effective addressing this new market. He cut his 52 cents 2006 EPS estimate to 14 cents.